In theory this is fixed by the the laws around “Transfer Pricing”. You are supposed to be able to prove that the deal between your different international enti

In theory this is fixed by the the laws around “Transfer Pricing”. You are supposed to be able to prove that the deal between your different international entities is an arms-length agreement. That is to say that the revenue sharing agreement is similar to what would be negotiated between unrelated companies. In order to do that you are supposed to be able to show evidence that the deal is similar to other deals in your industry and such. I don’t know how Google would get away with a licence fee of 100% under those laws so I kind of doubt that that is what they have in place. However, let’s say they have a 30/70 split with 70% going to the IP holder (Ireland company) and 30% going to the selling agent (USA company). Now it’s in the best interest of the company to attribute as many of the expenses of providing the service to the USA company so that we can get its profit down to zero. The profit margin of the US company might be 0% (so no tax) while the profit margin of the Ireland company is near 100%.