Google-Holland Pays $9.8 B to No-Tax Google-Bermuda

CA Practice: "Google-Holland Pays $9.8 B to No-Tax Google-Bermuda!"

"In Google's case, an Irish subsidiary collects revenues from ads sold in countries like the U.K. and France. That Irish unit in turn pays royalties to

another Irish subsidiary, whose legal residence for tax purposes is in Bermuda.

The pair of Irish units gives rise to the nickname "Double Irish." To avoid an Irish withholding tax, Google channeled the payments to Bermuda through a subsidiary in the Netherlands -- thus the "Dutch Sandwich" label. The Netherlands subsidiary has no employees.

The Dutch unit's payments to the Bermuda entity last year were up 81 percent to $9.8 billion from $5.4 billion in 2008. Google's overseas sales have increased at about the same rate.

Google's overall effective tax rate dropped to 21 percent last year from about 28 percent in 2008. That compares with the average combined U.S. and state statutory rate of about 39 percent !