Banning the Double Irish isn’t going to make all that much difference

US companies including Apple and Google could be hit with demands for billions of dollars after Ireland yesterday unveiled plans to close the ‘Double Irish’ tax loophole.

However, a new tax break and pressure to tackle avoidance elsewhere in the world means US companies are unlikely to depart from the struggling eurozone economy.

Analysts and tax advisers predict that corporations which need access to the European Union’s 500 million consumers will find it difficult to set up equally effective schemes in other member states, as Brussels investigates other arrangements that involve paying minimal tax rates

Well, Holland, as far as I know, has a 5% tax rate for royalties. So the Dutch Sandwich will still work pretty well. Tax rates might end up being higher than they have been but not all that much is my prediction.

11 comments on “Banning the Double Irish isn’t going to make all that much difference

  1. I thought this was rather good.

    We have no natural resources to speak of and are a small open economy with a population of 4.6m. We do not control our interest rates (the European Central Bank does) or the level of our currency (Frankfurt again). This leaves tax legislation as the one sovereign tool for obtaining an edge. We have used tax incentives to attract inward foreign investment, which leads to jobs – and, in the process, over two decades, have transformed a sluggish and backward agricultural economy into a European Silicon Valley.

  2. I’m pretty sure Eire would have been a lot worse off in recent years if they hadn’t attracted foreign investment.

  3. Bono’s currency may have rather depreciated over the past decade or so, the Right always thuoght he was a sanctimoneous bore; the Left has now taken against him for being a “hypocrite” (note, they never took against him for double standards before he broke their covnenant on tax-planning).
    However, I would argue that his claim to have worked over 30 years for poverty relief DOES stand up. Similarly his newly found faith in commerce (for eveyone else; he always beleived in it for himself) simply stands up to scrutiny. (In fact this last is self-evident to all except perhaps Ed Miliband and Richard Murphy.)

    Hooray for Bono.

    Discuss. Shoot me down folks.

  4. Tha Mail’s usual understanding of the details on display here:

    US companies including Apple and Google could be hit with demands for billions of dollars

    It’s being phased out over a period of years for firms who are already using it, isn’t it?

  5. Ironman,

    Bono’s charitable and political work came off the back of his once excellent singing and songwriting. In the light of the new album (and, you know, the last few as well), I don’t give a shit what he thinks. As long as he had enough spare talent to do both, fine. Now he clearly doesn’t, he needs to give up proseletysing to spend more time with his melodies.

  6. “Hooray for Bono”

    Even if Bono suddenly now became as genuinely altruistic and nice as Mother Theresa, the decades of sanctimonious and hypocritical badgering and abuse we’ve all had to endure on poverty etc from the tax-dodging little twat mean he’s heavily in debit.

    Even if he were in credit, not debit, I could never forgive those fvcking sunglasses he wears.

    Cvnt.

  7. I remember the time Bono flew down to the Amazon in his gold plated helicopter to hug a bemused native before flying back to his gold plated mansion where his personal army of Umpa-Lumpas was just finishing licking clean his gold plated bathroom suite before filling his bath with heated Champagne so he could have a bath and relax and worry about the impact that global warming was having on newts. Or something. And I remember thinking how stressful must be Bono’s life, what with having to worry about the environment AND try and remember the names of the other members of the band that aren’t him or the Edge and i remember thinking thank f I’m not him

  8. @Tim N

    Ha – yes. The boyos should be on the Eurostar, but then hating the Brits was fashionable, the EU not so much (yet).

  9. Reeling in the conversation back from Bono, I would say that the Irish have pulled off the PR stunt of the century! They got brownie points from various governments for appearing to have taken a step away from tax competition by phasing out the “Double Irish”. The half informed press eat it up, like starving kittens being fed their cream.

    In reality, as every tax savvy CFO has already (or soon will) figure out, they will either fall immediately into one of two camps. Those who are already there, or those who will rush there before the changes occur. In both cases, they will then have a number of years to restructure themselves to a) keep Ireland as their base for EU sales, assuming that Ireland’s 12% rate is still competitive or made more competitive; and b) if a US MNC keep their non-US (including net EU profits) out of the US by posting it anywhere but the US (but obviously not in a place with a heavy tax burden). Five years is an eternity in tax policy, and lots of new opportunities are sure to arrive during that time.

    Bottom-line, Ireland was seen by the rest of the world (And Senator Levin) to have “toed the line” but the voters of Ireland will remain happy as the existing Irish jobs will remain and more are sure to come.

    Now back to Bono. There is a great little movie called “Killing Bono” which I first saw on Air Lingus but that is now available on Netflix (at least here in Canada). Absolutely hilarious!

  10. And to my point about 5 years being an eternity, it took less than 7 days for the Irish government to announce patent box legislation with an even lower tax rate on IP.

    Its always that damn Prisoner’s Dilemma that mucks up those pipe dreams about a level global tax playing field. Welcome to the real world.

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