Google [NASDAQ:GOOGL] should expect that people are going raise eyebrows…with a 90% search market share in many European countries, they collected over €17 billion in Q2 2014 revenue from their European, Middle East and African operations but only paid €27.7 million in taxes through their Irish subsidiary.

The EU has harassed Google with antitrust cases for some time. This time, the European parliament is set to call for a break-up of Google, citing a long list of complaints, including abusive practices, internet copyright levies and discrimination against rivals.

I guess that it boils down to the Google-tax strategy known as “Double Irish”. This is how it works. Google sets up “Google Ireland, Ltd.” in Dublin, Ireland as their European Headquarters and “Google Ireland Holdings”, a Dublin-registered company located in Bermuda, for tax purposes. According KPMG Global, Ireland has a corporate tax rate of 12.5%, while Bermuda, the Cayman Islands, and the Bahamas have a 0% rate.

Each quarter, Google Ireland, Ltd. pays a fee, known as royalties or a license fee, and writes it off as “Administrative expenses” to its Google Ireland Holdings in Bermuda for the right to operate (whatever). Google Ireland, Ltd. can thereby massively reduce its taxable revenue and pay less tax.

My wild guess is that the issue between Google and the EU could go away if Google starts paying more taxes to the Europeans. Last year, Mr. Eric Schmidt, Google's executive chairman, continued to defend the company's tax affairs, insisting it would comply with British law if it was changed and claimed to be perplexed by the debate.

Disclosure: No long or short positions in GOOGL