Google Ireland revenues jump 16% to €26.3bn

Google Ireland, the Dublin-based hub through which the search engine diverts sales from across Europe, the Middle East and Africa, saw a 16 per cent jump in revenues as it continued to grow last year on the back of increasing advertising revenues.

Recently filed accounts for Google Ireland show revenues grew to €26.3 billion as the number of paid clicks through Google’s advertising programmes increased.

Operating profit at the local arm of the tech giant increased almost threefold to €1.34 billion while its after-tax profit came in at €1.18 billion. Google attributed its increased profit to a “higher demand for the company’s products” and a “revised intercompany pricing structure”.

For its activities in the 12 months to the end of December last year, Google paid €163.7 million in tax, an effective tax rate of 12.1 per cent, after a small number of deductions were made.

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Administrative expenses continued to rise last year, up from €17.1 billion to €19.4 billion. In 2014 administrative expenses came in at €3.5 billion. Those expenses included an increase in “headcount”, “sales and marketing efforts”, and “royalties paid to a group undertaking”.

Google would not comment when asked how much it had paid in royalties and to which group undertaking they were paid.

It has been reported in previous years, however, that Google Ireland has paid royalties to an entity in the Netherlands. In previous years the Dutch entity has moved these royalties on to other Google entities in tax-free offshore locations such as Bermuda.

Staff numbers up

The company’s staff count in Ireland increased by 256 to 3,080 last year while wage and salary costs went up by 12.6 per cent to €421 million.

Cost of sales at the firm also increased last year to €6.9 billion, or by 25 per cent, as “traffic acquisition” costs went up. Those costs consist of amounts paid to Google network members, as well as to partners who direct search queries to Google’s websites.

"2016 was a year of continued growth with global demand for our advertising products and services continuing to increase. The [Europe, Middle East and Africa] sales organisation here in Dublin is driving that growth across Europe and we continue to deliver value for our advertisers, publishers and partner networks," Google's Fionnuala Meehan said.

While no dividends were paid throughout the financial year for 2016, an interim dividend of €1.6 billion was paid this year to the company’s shareholder. Google’s ultimate controlling party is the US-incorporated Alphabet.

The company has been continuing its Irish expansion over the past year and announced on Tuesday that it acquired the lease on the 51,000sq ft Velasco building on Dublin’s Grand Canal. In 2016 the company opened its second data centre here at a cost of €150 million.