Why the end of Google’s “double Irish” tax avoidance will come with a nasty hangover

Google’s new corporate structure won't necessarily produce any extra tax revenues for the UK, and it may undermine efforts to reform the global tax system.

By George Turner

NEW YORK, NY - JUNE 3: The Google logo adorns the outside of their NYC office Google Building 8510 at 85 10th Ave on June 3, 2019 in New York City. Shares of Google parent company Alphabet were down over six percent on Monday, following news reports that the U.S. Department of Justice is preparing to launch an anti-trust investigation aimed at Google. (Photo by Drew Angerer/Getty Images)

On New Year’s Eve, Google announced via the medium of a corporate filing in Dublin that 2019 would be the last year in which the company would use the notorious “double Irish” loophole to avoid paying tax.

Google has used the scheme since 2004. In the 15 years since then the company has diverted vast sums away from tax and into its own investments. By 2017, Google Ireland Holdings Unlimited, a company tax resident in Bermuda, disclosed that it owned $55 billion in marketable securities. These investments, mainly in government debt, were funded by the tax-free profits it had made from its operations around the world.