Bermudan postbox numbered 666 receives Google profits worth £8 billion a year

Google has no office, no staff and little more than a plain PO Box numbered 666 on the sunny Caribbean Island of Bermuda.

But it still sends £8billion in profits a year to the island - which happens to have a 0 per cent corporation tax rate.

Google's communications chief Peter Barron today insisted the billions of pounds funnelled from the search engine's global network of subsidiaries had no impact on the firm's tax bill in Britain.

But after a week dominated by criticism of an agreement between Google - which once had the slogan 'Don't be Evil' - and HMRC to pay just £130million in back taxes for the past decade details of the company's arrangement on Bermuda are set to shock.

Google's tax bill in Britain is held down by the firm's insistence it has no 'permanent' base here - on the basis all sales in Europe are made via Dublin.

The Sun on Sunday revealed the Bermudan government's 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 Street, Hamilton.

The firm is based just a few streets from the PO Box to which Google directs billions in profits.

Pressed on why the company the moves £30billion of global revenues onward to Bermuda - which has a corporate tax rate of 0 per cent - Mr Barron said: 'It's very, very important to make it clear that the Bermuda arrangement has absolutely no bearing on the amount of tax we pay in the UK.'

Google manages to reduce its tax bill by using a set of subsidiary companies across the globe.

The network - nicknamed the 'Double Irish and Dutch Sandwich' - is hugely controversial but totally legal.

In Britain, its biggest market outside the US, Google is classified as having no 'fixed base' so none of its sales are technically made in the UK.

It means when a British company buys a Google advert for the UK, for example, the money goes straight to Dublin, meaning it pays little tax to the UK Treasury.

After paying Ireland's lower corporation tax rate of 12.5 per cent, international profits are then funnelled via Google Netherlands Holdings, taking advantage of generous tax laws there.

The profits are then sent to Google's main overseas company, another Irish business domiciled in Bermuda - where the corporation tax rate is zero.

This complicated arrangement is explained by experts as the Double Irish and Dutch Sandwich - with the Irish businesses being the bread and the Dutch subsidiary being its filling.

It means that Google's overseas tax rate on all its profits falls to around five per cent when in the UK it would have to pay 20 per cent.

Though this process has been branded 'immoral' by MPs, it is not illegal and Google says it has abided by international tax rules.

The company also says its Bermuda operation does not impact the tax it pays in the UK.