Google has told Dutch authorities that it would halt a scheme which has seen it avoid paying billions of dollars in taxes to country coffers in Europe and USA.

“A date of termination of the company’s licensing activities has not yet been confirmed by senior leadership, however, management expects that this termination will take place as of 31 December 2019 or during 2020,” the filing with the Dutch Chamber of Commerce said.

“Consequently, the company’s turnover and associated expense base generated from licensing activities will discontinue as of this date.”

The move is not out of the goodness of Google’s heart, however.

The Organisation for Economic Co-operation and Development (OECD) has been encouraging countries to change their laws and regulations to limit international tax avoidance, leading to changes to US and Irish tax law. In 2017, US authorities gave companies until the end of 2020 to end their till now legal tax avoidance schemes.

In 2018 Google moved €21.8bn ($24.5bn) through its Dutch holding company to Bermuda, up from €19.9bn in 2017.

It is however not clear if technology companies, who are estimated to have saved billions in tax over the years, will not simply find other routes to avoid paying their fair share of taxes.

“Based on what we have been able to see in the past, there is no reason to think that planning [by multinationals] hasn’t already evolved several generations beyond the kind of classic ‘Double Irish’ that is now officially coming to an end,” Chris Sanchirico, a law professor at the University of Pennsylvania, told the Financial Times.

“US multinational firms are the global grandmasters of tax avoidance schemes that deplete not just US tax collection but the tax collection of almost every large economy in the world,” said Ed Kleinbard, a former corporate lawyer and now a professor of tax law at the University of Southern California.

The 2017 leak of the Paradise Papers, which revealed a large number of off-shore investments, showed that Apple, for example, had found a new wat to avoid taxes by routing international profits through Jersey.

Via The Guardian

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