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If the USA adopted Ireland's tax code then companies would have to pay 12.5% on trading income. The reason Ireland is a good place for American companies is bec
by rorykoehler 11y ago
If the USA adopted Ireland's tax code then companies would have to pay 12.5% on trading income. The reason Ireland is a good place for American companies is because of a loophole called the Double Irish. Basically Irish based companies pay tax where they are originally registered and in Delaware the code stipulates that taxes get paid where the revenue was generated. That means the US expects the companies to pay the tax in Ireland and the Irish expect the companies to pay the tax in the US. Therefore the potential tax payment ends up in no-mans land and never gets paid whilst remaining all perfectly legal.
- s_dev 11y agoDouble Irish is virtually finished -- your information is outdated. Only a select number of companies can avail of it that had already done so and it's being phased out and will be completely gone by 2020.
- rorykoehler 11y agoIt is what brought all the big tech companies to Ireland in the first place but yes it is being phased out. The latest seems to be another loophole where companies register a subsidiary as tax resident in an actual 0% tax haven and then pay royalties to said subsidiary. This gives them zero profit and therefore zero taxable income but there is very little Ireland can do about without shooting itself in the foot (such as taxing revenue and ensuring Apple et al close up shop and take their business elsewhere). If they decide to be tax resident in Ireland the 12.5% corporation tax is hardly a 'tax haven' but it's still better than most. Another big draw is the amount of money the Irish government puts up to attract FDI through their Industrial Development Authority (IDA).