The Endangered Double Irish Could Make Apple, Google, Twitter And Others Pay Way More Taxes According to Feargal O’Rourke, a partner at PricewaterhouseCoopers, the infamous Double Irish tax avoidance method could be endangered. If it were to be written out of law, the legal practice would force many companies to either find new methods to avoid taxation, or pay far higher rates on their profits. Before we dig into the details of the matter, keep in mind that it is the responsibility of every tax-paying entity to arrange its affairs in the way that will most limit its tax bill, and then pay every cent of that total. The gist is that we should expect corporations to pay as little in taxes as they can. How they manage to do so while staying inside of the law you may find abusive, or asinine, but you should never be surprised by their efforts. O’Rourke is a voice that matters as he advises a number of companies on how to employ the Double Irish tax avoidance method. Intel, for example, is his client. He has worked with Facebook, Google, and LinkedIn. In an interview with Bloomberg, O’Rourke predicted that the Double Irish will, in time, become illegal. Regarding government policy, O’Rourke has standing, as, Quartz notes, he helped end a 20 percent tax on profits leaving Ireland. This made use of the country as a place to more simply shuffle around revenue and profit. What Is The Play? So, what is the Double Irish, or the Double Irish with a Dutch Sandwich? It’s a form of income moving that helps companies avoid huge tax bills. In the same report, Bloomberg states that Google saved $2.2 billion last year using the technique, and that companies overall slip past around $100 billion in taxes in the United States and Europe yearly through its effectiveness. So, the dollars at play here are not small. Here’s how it works: Move your money to Ireland, then the Netherlands, and finally to a tax haven such as Bermuda, but in a very specific order. Develop technology or other intellectual property in the United States. Set up a corporate subsidiary in Ireland, and sell (or license) foreign rights to said intellectual property. However, ensure that this company is headquartered in Bermuda, or a different but similar tax haven. Foreign profits that come from revenue based on that intellectual property can now be assigned to that entity. This means that the parent company will not pay home-market taxes on ift.tt/18wgJvC ift.tt/1alpS0E Source: TechCrunch
Posted on: Tue, 29 Oct 2013 00:49:04 +0000
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