Google moved $22.7 billion through a Dutch company to Bermuda in 2017, an increase of about $4.5 billion on the previous year.

The tax strategy, known as “Double Irish, Dutch Sandwich”, is legal, but has been criticised in the past as an arrangement that allows Google to reduce its foreign tax bill.

Reuters reported that €19.9 billion of revenue from royalties earned outside the US was moved by the technology company through its subsidiary Google Netherlands Holdings BV to Google Ireland Holdings, which is registered in Bermuda.

In a statement, Alphabet Inc’s Google said: “We pay all of the taxes due and comply with the tax laws in every country we operate in around the world.

“Google, like other multinational companies, pays the vast majority of its corporate income tax in its home country, and we have paid a global effective tax rate of 26 per cent over the last ten years.”

Reuters noted that moving the revenue through the Netherlands to Bermuda avoided “triggering US income taxes or European withholding taxes on the funds, which represent the bulk of its overseas profits”.

Under pressure from the US and European Union, Ireland is phasing out the arrangement in 2020.

Reuters reported that according to documents filed at the Dutch Chamber of Commerce, Google Netherlands Holdings BV paid €3.4 million in taxes in the Netherlands in 2017 on a gross profit of €13.6 million.

Three years ago, a number of newspapers in Britain put Bermuda under the spotlight regarding the billions of dollars sent to the island by the internet giant. In 2016, The Sun on Sunday highlighted how Google directed billions of dollars of profits a year to the island, and noted the company’s only physical presence in Bermuda was a post office box, numbered 666, located at the General Post Office in Hamilton.

The newspaper explained how Google moved money through Ireland and the Netherlands before it reached Bermuda, where Google Bermuda Unlimited and Google Ireland Holdings were registered at the address of law firm Conyers Dill and Pearman, on Church Street.