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Google funneled €8.8 billion ($12 billion) of royalty payments to Bermuda last year, a quarter more than in 2011, underlining the rapid expansion of a strategy that has saved the U.S. internet group billions of dollars in tax. By routing royalty payments to Bermuda, Google reduces its overseas tax rate to about five percent, less than half the rate in already low-tax Ireland, where it books most of its international sales. The figures were revealed in the latest filings by one of Google's Dutch subsidiaries, and means that royalty payments made to Bermuda – where the company holds its non-U.S. intellectual property – have doubled over the past three years. This increase reflects the rapid growth of Google's global business. (Read more: Google pays $55 million tax in Britain on 2012 sales of $5 billion)

The company has been at the center of the international controversy over corporate tax avoidance because it earns "substantially all" its foreign income in Ireland and pays relatively little tax in the countries where its customers are based.

It has also faced criticism for its use of a "double Irish" structure that exploits differences between the U.S. and Irish tax codes to move the profits from Ireland to Bermuda. It also routes the profits through the Netherlands to avoid withholding taxes, using a structure known as a "Dutch sandwich". Google declined to comment. Revelations about Google's tax planning have stoked widespread public anger, prompting politicians to launch an international crackdown on corporate profit shifting. The problems raised by digital companies is one of the central issues being addressed by the initiative launched by the G20 group of leading economies this summer. In principle, multinationals such as Google that pay relatively little tax overseas will face big bills in the U.S. when they bring their earnings back to the U.S. But Google has not provided for extra U.S. tax because it intends to permanently reinvest $33 billion of offshore profits outside the U.S.\

(Read more: Bono defends Ireland's low taxes)

The new figures come from the accounts of Google Netherlands Holdings, which represents the "Dutch sandwich" part of the tax structure. It received €8.6 billion in royalties from Google Ireland Ltd and €232.8 million in royalties from Google's Singapore operation. All but €10.4 million of this was paid out to Google Ireland Holdings, a company that is incorporated in Ireland but controlled in Bermuda.