$16bn-a-year in Google postbox: Inside giant’s secret Bermuda haven

Pete Samson and Isla Harvey

TECH giant Google is funnelling an estimated $A16 billion (£8 billion) of profits a year through a nondescript postbox in Bermuda.

The firm has taken advantage of the sunshine island’s zero corporate tax rate to set up Google Bermuda Unlimited.

There are no employees, no office and no signage to be found there.

Its only presence is the tiny metal box bearing the number of the beast, 666, and housed at a post office building in the capital Hamilton.

Last week Google — whose slogan was once “Don’t be evil” — was slammed over a deal to pay HM Revenue & Customs $A262 million (£130 million) in back taxes covering the past 10 years, despite profits of $A12 billion.

That’s a rate of just 3 per cent.

Google says it has no permanent UK base despite a string of fancy offices housing 2300 staff.

At the Bermudan government’s official Registrar of Companies, Google Bermuda Unlimited and Google Ireland Holdings are registered to the address of Conyers Dill and Pearman, a law firm at Clarenden House, 2 Church St, Hamilton.

The firm specialises in “offshore corporate, litigation and private equity matters”, and its address is just three blocks from the post office which houses the PO box.

Google, which makes most of its money through online advertising, has been moving profits to the tax haven via Ireland and Holland.

In 2013, it sent $A14 billion (£7.5 billion) in global royalties to its Bermuda-based subsidiary, according to the company’s own accounts.

It is thought this will have risen to more than $A16 billion (£8 billion) for last year.

Yet few people in Bermuda realise the tech giant holds its entire global earnings, excluding the US, on the island — including those who work at the very building housing the law firm.

Google funnels an estimated $16 billion of profits through Bermuda each year. Picture: AP Photo/Virginia Mayo

Google funnels an estimated $16 billion of profits through Bermuda each year. Picture: AP Photo/Virginia MayoSource:AP

Derrick Ward, 51, has delivered mail in the postal department of Conyers Dill & Pearman for the past four years.

He had no idea Google’s offshore base was on his doorstep.

Derrick said: “Google don’t have an office in the lawyers’ building. I’m sure we’d know about it if they did.

“If there was a Google HQ on Bermuda it would be clear to see. I hear they have football pitches at their offices. I’ve never met anyone who works for Google in all my life”.

The Sun on Sunday approached a receptionist at the law firm who claimed she had been working there for 35 years.

She also had no idea that Google conducted business dealings on the island, a British overseas territory.

Speaking from the drab-looking office, which is decked with plastic ferns, 1980s-style furniture and tacky oil paintings, she said: “Google doesn’t have an office here, they don’t employ any staff here.”

But after referring to her computer, the receptionist said that Google Bermuda Unlimited is registered at PO Box 666 through the law firm’s affiliate company, called Codan.

Long-time post office clerk Carla Cann said: “I’ve never heard of Google being on the island.

“It’s a small place. We’d know all the businesses here. I’ve never met anyone who works for Google.”

The search giant’s presence in the UK is a far cry from the windowless reception of the Bermudan law office.

It has multi-million-pound contracts to rent four central London buildings plus a northern headquarters in Manchester.

It is also spending $A2 billion) (£1 billion) on a London super-HQ for 5000 staff.

The offices, including its main HQ in the multicoloured Central St Giles, are renowned for their bold and trendy interiors and spaces for staff to enjoy, including a free bar.

Six years ago, HMRC began auditing Google for its international tax structures and the fact it moves revenue through countries that have lower tax rates than the UK.

Chancellor George Osborne hailed the Treasury’s settlement to get back £130 million from Google in unpaid back taxes as a victory for the taxpayer.

But the deal was blasted by critics, who said Google should have been paying 10 times that amount.

Britain's Chancellor of the Exchequer, George Osborne, has gone after Google for unpaid back taxes. Picture: Ben Birchall/PA via AP

Britain’s Chancellor of the Exchequer, George Osborne, has gone after Google for unpaid back taxes. Picture: Ben Birchall/PA via APSource:AP

And last week British Prime Minister David Cameron defended the Tories’ efforts at collecting Google taxes, saying it should have been done under the last Labour government.

The whistleblower who helped reveal how Google was avoiding paying tax in the UK called it a “sweetheart deal”.

Barney Jones, 37, an executive at the tech firm from 2002 to 2006, added that “heads should roll” at HM Revenue and Customs for allowing it to pass, and that the figure was “pocket change” for Google.

Steve Hilton, a former adviser to David Cameron, said he sympathised with public anger because Google appeared to operate “above the law”.

He said: “There is a growing sense that companies that are so big and so dominant, not just in the marketplace but in the way they relate to governments, their lobbying efforts and so on, that they really are above the law.”

Britain is Google’s biggest market outside America yet French tax officials are close to squeezing far more out of the firm in back payments.

Hamilton, Bermuda: Home to the Google business that the locals know nothing about.

Hamilton, Bermuda: Home to the Google business that the locals know nothing about.Source:istock

Google executive Matt Brittin has defended its UK tax deal.

And Peter Barron, the company’s European public affairs chief, added: “We are paying the full amount of tax that HMRC agrees we should pay.

“Governments make tax law and tax authorities independently enforce the law, and Google complies with the law.”

The Sun called Conyers Dill and Pearman’s Bermuda office and asked to speak to the person who dealt with the Google account.

The paper was referred to Samira Saya, corporate manager at the law firm’s affiliate Codan.

Asked about the firm’s work with Google, she said: “We’re not in a position to discuss our clients.”

Google claims its Bermudan operation does not impact the tax paid in the UK.

The company deploys a strategy known as the “Double Irish with a Dutch Sandwich” to shrink its tax bill.

It sends revenue first through a company in Ireland, which has lower corporation tax than the UK, then to a company in Holland and finally to a second Irish company headquartered in Bermuda.

Google is one of five giant US tech firms sitting on huge piles of cash, including Apple and Microsoft.

The companies keep the majority of their overseas earnings abroad to keep it beyond the reach of the US and its 35 per cent tax rate on repatriated cash.