Corporate Tax

The company tax of the know-how big rolls on

It’s a fair bet that Google will be among the 10 companies that can generate half of the corporate income tax it collects annually. His total corporation tax payments in 2020 were € 622 million on his most recent balance sheet and are sure to have increased since then.

The 2020 tax payments have been announced in their Irish subsidiary’s latest accounts filed with the Companies Office. But more attention was paid to a tax return the company made for € 345 million including interest, relating to “previous years”. No further information was given in the annual financial statements.

The company does not comment, but it is believed that the tax payment relates to royalties paid to a Google subsidiary in Bermuda under the old “double Irish” tax structure previously operated by the company. As part of this structure, Google forwarded royalty payments from Ireland to Bermuda through a Dutch subsidiary, while maintaining a low tax rate on profits outside the US. After rule changes driven by the OECD, including the end of the double Irish, it relocated its intellectual property to the US in 2020.

License fees

The payment of royalties is subject to complex transfer pricing rules and the Irish tax authorities appear to have argued that Ireland is more taxed. Given the billions in royalties that Google has moved, a small percentage between Google and revenue may have been in dispute, but that still referred to a substantial comparison of $ 218 million plus $ 127 million in interest. After a € 297 million comparison from Perrigo, this represents a significant boost to the already healthy corporate tax revenue.

He again underlines the dependency of the treasury on a small number of very large companies for corporate income tax payments. The top 10 could pay 7 to 8 billion euros in corporate income tax as well as substantial income taxes and PRSI for themselves and their employees this year. In each of the past few years budget estimates for corporate tax income have been exceeded. This was especially welcome this year given the cost of Covid-19. With the next phase of corporate tax reform imminent, threats are imminent, but in the short term, the money just keeps flowing.

Related Articles