Ireland will abolish the "Double Irish" tax loophole for multinationals

[Zanza]

http://online.wsj.com/articles/ireland-considers-closing-corporate-tax-loophole-1413139198

Ireland Considers Closing Corporate-Tax Loophole
Multinationals Gird for Possible 'Double Irish' Changes; Google, Facebook Would Be Affected

Multinational companies are bracing for their last serving of the "Double Irish."

Ireland is expected on Tuesday to announce changes to its tax code that could eventually close one of the world's most famous corporate-tax loopholes, dubbed the Double Irish, after heavy pressure from governments and the European Union, tax experts say.

Already, companies particularly in the technology and pharmaceutical sectors are setting up battle plans to cope with potential changes.

"A lot of companies are starting to plan now," said Francesca Lagerberg, global leader for tax services at Grant Thornton International. "You can't afford to wait."

The Double Irish uses a twist in Irish laws to funnel royalty payments for intellectual property from one Irish-registered subsidiary to another that resides for tax purposes in a country with no corporate income taxes.

It is often paired with a related tax structure that planners call the "Dutch Sandwich," which uses a Netherlands-based structure to avoid certain taxes. The Double Irish structure allows companies to legally shift billions of euros in profit to tax havens each year.

Companies using the structure or variants include Google Inc., Facebook Inc. and cloud-computing company VMware Inc. according to corporate filings. Google and Facebook have said they pay all the taxes they owe. VMware declined to comment.

Ireland and the Double Irish have become flash points in a broader push to overhaul the corporate tax system. The Organization for Economic Cooperation and Development has said that one goal of its recommended changes to tax laws is to end so-called cash-box arrangements that allow companies to shift profits to tax havens.

The EU has also targeted Ireland for allegedly granting sweetheart tax deals to Apple Inc., AAPL +0.26%  something the country and company deny.

The Irish government has bristled at the pressure. "Any changes to Ireland's taxation system is a decision to be taken by government as part of the budgetary process," a spokesman for the Irish finance ministry said, adding that the new budget is due Tuesday.

Tax experts say they expect the country will announce the Double Irish will be phased out, possibly through changes or future changes to the country's tax resident rules. "All the signals we are getting are that it is happening this year," said Feargal O'Rourke, head of tax for PricewaterhouseCoopers in Dublin.

It remains unclear how quickly the changes would take effect. There will likely be a grandfathering clause of between three and seven years to give companies time to plan, tax experts and tech-company officials said. That timeline would overlap with the implementation of recommendations expected from the OECD, which announced its first set in September and will deliver the final batch late next year.

Companies are already considering possible changes to corporate structure, tax experts said. Those could involve closing subsidiaries or shifting where they house their intellectual property. "We've been working with client companies" to figure out "what their options might be," said Anna Scally, a tax partner at KPMG Ireland.

Many of the companies that use the Double Irish are U.S.-based tech companies.

VMware for instance, has an Ireland-registered subsidiary named VMware Bermuda Ltd. that last year pulled in €1.43 billion ($1.8 billion) in licensing fees from the Irish unit that markets and sells VMware software and services, according to a corporate filing. VMware Bermuda paid no corporate income tax last year, the filing says.

A Facebook subsidiary in Ireland reported €1.79 billion in revenue in 2012. But the unit posted a pretax loss of €626,000, after subtracting €1.75 billion in administrative fees, which included royalties for use of the Facebook platform to Facebook Ireland Holdings, which is controlled via the Cayman Islands, according to corporate filings.

Good. 

[Martinus]

[tamas]Communists.[/tamas]

[Iormlund]

I'd rather have tax havens and those with accounts in them carpet-bombed* to bits, but you can't always get what you want.







* Naval shore bombardment would be ok, too. Though the plan might run into difficulties with Liechtenstein and the like.

[derspiess]

That's not very nice.

[Duque de Bragança]

Multinationals will find another loophole but it's a good step anyways.

[CountDeMoney]

"Double Irish"?  Sounds like some sort of sex act.

"...and then, after the moustache ride and sixpacking her, I gave her a Double Irish!"

[derspiess]

Sounds like knocking her up with twins when she already has 7 kids.

[CountDeMoney]

THATS REAL PROTESTANT SIR

[jimmy olsen]

"Double Irish"?  Sounds like some sort of sex act.

"...and then, after the moustache ride and sixpacking her, I gave her a Double Irish!"

six packing?

[Tonitrus]

If you have to ask, you don't want to know.

[Admiral Yi]

It's the punch line to an old joke.

Why are a woman's asshole and vagina so close together?

So you can carry them around like a six pack.

[Crazy_Ivan80]

That's not very nice.

would help persian exports though

[garbon]

Apparently Abbvie has now decided that acquiring Shire Pharma wouldn't be in their best interests...and as a result Shire gets paid 1.6 billion.

[CountDeMoney]

Apparently Abbvie has now decided that acquiring Shire Pharma wouldn't be in their best interests...and as a result Shire gets paid 1.6 billion.

lol, Shire.  Gotta love a pharmaceutical company whose website has a section on "Share Price" placed in front of the "Our Products" section.  How positively Yi.

[garbon]

Apparently Abbvie has now decided that acquiring Shire Pharma wouldn't be in their best interests...and as a result Shire gets paid 1.6 billion.

lol, Shire.  Gotta love a pharmaceutical company whose website has a section on "Share Price" placed in front of the "Our Products" section.  How positively Yi.

I just checked Pfizer and Eli Lilly. Both post about their share price in easy to note spot. Roche doesn't show their  price (same for AstraZeneca), Novartis has it far down on a scrolling page (same for Abbvie).