Belfast Telegraph

Republic gains corporation tax boost as Google grows

Google Ireland paid €17m (£14m) in corporation tax in the Republic last year – twice as much as it did in 2011, according to accounts just filed by the internet giant.

But the tax paid – on a pre-tax profit of €137m (£115m) generated from €15.5bn (£13bn) in revenue – is unlikely to allay concerns about how multinationals use Ireland to lower their group tax liabilities.

Google – which employed 2,200 people in Ireland at the end of 2012 – said that revenue at the Irish arm jumped 24% to €15.5bn last year.

This was driven by what it said was an increase in advertising generated by Google websites and network members' websites.

The cost of sales at the Irish division – headquarters for Google's EMEA business – rose 32.3% in 2012 to €4.5bn (£3.8bn).

Its after-tax profit soared to €120.2m (£100.6m) from just €2.2m (£1.8m) the previous year.

John Herlihy, the head of Google Ireland, said 2012 was a period of "sustained growth" in the EMEA operation.

"Our growth reflects the strength of the European digital economy which the EU Commission estimates is growing seven times faster than the traditional economy," he added.

"Increasing amounts of business [are] being transacted online and our success in delivering relevant, cost-effective online advertising for our customers is reflected in the increase in revenue and turnover achieved in 2012."

Google – which has just celebrated its 15th birthday – has had a presence in Ireland for the last 10 years.

It recently announced a €5.5m (£4.6m) investment in 'The Foundry' – its new digital innovation centre in Dublin which will attract visitors from all over Europe. Google has also been at the eye of a storm over how multinationals use Ireland to lower their tax burden.

The European Union has launched a probe into multinational operations in Ireland, the Netherlands and Luxembourg to ascertain if the countries provided any 'sweetheart' deals to international corporations.

The investigation came on the heels of allegations that Apple had a special tax arrangement in Ireland.

Google chairman Eric Schmidt defended Ireland's 12.5% corporate tax rate this summer.

The European Commission's competition authorities have asked Ireland, Luxembourg and the Netherlands to explain how various tax rulings work.The company's extra tax bill is unlikely to allay concerns about how mulitnationals use Ireland to lower group tax liabilities

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