Google Moves $23B to Bermuda Tax Haven in Single Year

Dutch regulatory filings revealed that in 2017, Google transferred $23 billion (€19.9 billion) through its Netherlands shell company to its Bermuda-based entity—one of the largest single-year tax avoidance maneuvers in corporate history, allowing Google to avoid approximately $4 billion in taxes on legitimate business profits earned globally.

The Discovery

January 2019: Dutch Chamber of Commerce filings revealed 2017 financial data for Google Netherlands Holdings BV

Transfer amount: €19.9 billion ($22.7 billion at 2017 exchange rates, widely reported as ~$23 billion)

Destination: Google Ireland Holdings, an Irish-incorporated company tax-resident in Bermuda

Result: $23 billion in profits accumulated in Bermuda tax-free (0% corporate income tax)

The disclosure was accidental—Netherlands requires certain corporate filings that exposed the scale of profit shifting Google tried to keep secret.

The Accelerating Pattern

Google’s Bermuda transfers were increasing:

2015: $15.5 billion 2016: $15.9 billion 2017: $23 billion (45% increase)

The acceleration suggested Google was rushing profits offshore before expected regulatory crackdowns.

The Structure

The $23 billion moved through Google’s Dutch entity because:

Step 1: Google’s Irish operating company received global (non-US) advertising revenues Step 2: Irish company paid ~90% as “royalties” to Dutch entity for intellectual property licensing Step 3: Dutch entity immediately transferred payments to Bermuda entity (Google Ireland Holdings) Step 4: Profits accumulated tax-free in Bermuda

Tax saved: At standard corporate rates, the $23B would incur:

• ~35% US tax if repatriated: $8.05 billion
• ~20-25% average foreign tax: $4.6-5.75 billion

By routing through Bermuda: $0 in current taxes (taxes “deferred” indefinitely)

2017 tax savings: ~$4-5 billion from single year’s transfer

What the $23 Billion Represented

The money was real business profits from:

• Search advertising sold to European businesses
• Display advertising across Asia
• YouTube advertising globally
• Google Cloud services
• Android app store revenues

These were legitimate business earnings that should have been taxed where the economic activity occurred—instead, Google used artificial structures to shift them to a jurisdiction with no business presence beyond a corporate registration.

Why Bermuda?

Zero corporate income tax Zero withholding taxes No public disclosure requirements (filing was in Netherlands, not Bermuda) No substance required: Google’s Bermuda entity had no employees, offices, or operations Political stability: British Overseas Territory with stable legal system

Bermuda exists purely as a tax avoidance destination—Google’s entity there performed no actual business functions.

The Netherlands’ Role

Netherlands was essential to the structure:

Conduit jurisdiction: Allowed royalty payments from Ireland to Bermuda without withholding taxes EU participation agreements: Prevented withholding under EU directives Minimal disclosure: Required some filing but less than many jurisdictions Attracted multinationals: Netherlands deliberately positioned itself as tax planning hub

The Dutch entity Google Netherlands Holdings BV had minimal operations—it existed to move money between Ireland and Bermuda while avoiding withholding taxes.

The Timing: Before the Crackdown

The massive 2017 transfer occurred as international pressure mounted:

2013: Senate investigations exposed tech tax avoidance 2014: Ireland announced phase-out of Double Irish (effective 2020) 2015: OECD BEPS project aimed to curb profit shifting 2016: EU investigations into tax rulings 2017: Anticipated Trump tax reform

Google was racing to shift profits offshore before regulatory changes limited the ability to do so.

Trump Tax Reform Impact

The 2017 Tax Cuts and Jobs Act (passed December 2017, effective 2018):

Reduced corporate rate: 35% → 21% One-time repatriation: Tax holiday on bringing offshore profits back to US Territorial system: Changed to territorial taxation (generally not taxing foreign earnings) GILTI/BEAT provisions: New minimum taxes on offshore profits

The reforms reduced incentives for profit shifting—but Google had already moved $23B offshore at 2017 rates before the change.

Where the Money Went

Google accumulated the $23 billion in Bermuda alongside decades of prior profit shifting:

Use of offshore cash:

• Invested in US treasuries and corporate bonds (earning interest tax-free)
• Held for potential acquisitions
• Eventually repatriated during Trump tax holiday at reduced rates
• Distributed to shareholders through buybacks (after paying minimal repatriation tax)

The money sat offshore earning returns while avoiding taxation, then returned to US at discounted rates during the tax holiday.

“Don’t Be Evil” Long Gone

By 2017, Google had:

• 2015: Removed “Don’t be evil” from code of conduct
• 2015: Restructured as Alphabet Inc.
• 2017: Moved record $23 billion to tax havens
• 2019: CEO Sundar Pichai earned $280 million (partially funded by tax avoidance)

The evolution from “don’t be evil” to aggressive tax avoidance epitomized Google’s transformation from idealistic startup to profit-maximizing monopolist.

The Investigation and Exposure

Guardian and Bloomberg investigations documented:

Scale: $23B in single year Pattern: Part of $100B+ shifted to tax havens 2003-2017 Structure: Entirely artificial—no business reason beyond tax avoidance Lost revenue: Approximately $30-50 billion in avoided taxes over lifetime of scheme

Investigative journalism was crucial—without Dutch filing requirements exposing the data, the public would never have known the scale of profit shifting.

Google’s Response

Google maintained:

• Structures complied with tax law (technically true, legally designed to exploit loopholes)
• Paid “all taxes owed” (after structuring affairs to minimize what was “owed”)
• Would end Double Irish by 2020 (only because Ireland closed it)

No apology for avoiding tens of billions in taxes, no acknowledgment of harm to public finances, no voluntary commitment to fair taxation.

End of Double Irish (2020)

2019: Google announced it would close Double Irish structure 2020: Formally ended arrangement Reason: Ireland’s policy change made structure unavailable, not voluntary reform

What changed: Method of tax avoidance What didn’t change: Google’s aggressive minimization of global tax obligations

Google simply shifted to other tax avoidance structures compliant with post-2020 rules.

The Cumulative Impact

Google’s profit shifting through Bermuda (2003-2019):

Estimated total: $200+ billion shifted to Bermuda Taxes avoided: $30-50 billion Public services unfunded: Schools, infrastructure, healthcare, research sacrificed Wealth concentration: Avoided taxes became shareholder profits

The $23 billion 2017 transfer was the largest single year in decades of systematic tax avoidance.

Comparison to Other Companies

While Google’s $23B transfer was massive, other tech companies used similar structures:

Apple: Shifted even more to Ireland (>$100B offshore) Microsoft: Substantial offshore profit accumulation Facebook: Similar Irish/Dutch structures Amazon: Luxembourg-based tax avoidance

The entire tech industry used variations of profit-shifting schemes, with Google’s 2017 transfer being among the most dramatic single-year examples.

Significance

The $23 billion Bermuda transfer exemplified:

Scale of corporate tax avoidance: Individual countries powerless against massive profit shifting

Artificial structures: Money routed through entities with no real operations

Regulatory failure: Years of investigations, zero prevention

Wealth extraction: Public taxes → shareholder profits

International coordination needed: Single countries can’t stop determined multinationals

The transfer demonstrated that tax havens and profit-shifting remain highly effective for tech giants despite decades of attention, international reform efforts, and public criticism—showing that meaningful reform requires fundamental changes to international tax architecture, not just individual country actions.

The fact that Google accelerated profit shifting to $23 billion in 2017 while knowing reforms were coming showed the company prioritized extracting maximum tax avoidance benefit before regulatory changes limited the practice—exemplifying corporate behavior that treats tax obligations as obstacles to be minimized rather than contributions to societies they profit from.