Google’s Irish subsidiary posts $2.03bn profit

One of Google’s Irish subsidiaries posted a profit before tax of $2.03 billion (€1.83 billion) in 2018, a 45 per cent increase on the previous year, on turnover of $2.6 billion.

Google Europe International Technology Unlimited, which generates revenue from royalty income for selling intellectual property to other group companies, said its turnover rose by $634 million in the year.

The company paid corporation tax of $255 million (€203 million) in the period, an effective rate which is slightly higher than the statutory rate of 12.5 per cent in the Republic.

Those figures come after a Department of Finance report last week noted that the Government has enjoyed a near €6 billion bounce in corporation tax receipts since 2014.

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The report also highlighted "the concentrated nature of revenues" with 80 per cent of last year's €10.4 billion total coming from a relatively small cohort of mainly US multinationals in the pharmaceutical, technology and finance sectors . About 45 per cent of last year's total came from just 10 companies, understood to include tech giants Google, Apple, Microsoft, Dell and Oracle.

Onshoring of assets

The jump in receipts has been linked to the onshoring of assets here in the wake of a global clampdown on multinational tax avoidance and increased corporate profitability generally.

Google Europe International Technology reduced its intangible assets here during the year from $2.7 billion to $2.1 billion. Given the nature of the company’s business, this is all likely to be comprised of intellectual property.

Also during the year, the company ultimately owned by the Nasdaq-listed Alphabet said it made “interim distributions” of $3.2 billion to one of its shareholders. And in March, the company made a further distribution of $534 million to one of its parent companies, Google Bermuda Limited.

This entity doesn’t employ any staff, while the directors behind it are supported by staff of other group undertakings.

Fellow group companies owed the Irish-based entity $691 million during the year, while it owed $148 million to other group companies.