Corporation tax in the Republic of Ireland

From Wikipedia, the free encyclopedia
Jump to: navigation, search
Finance Min. Charlie McCreevy Reduced Irish corporate tax from 32% to 12.5% in the 1999 Finance Act, and whose 1997 Tax and Consolidation Act, laid the framework for the multinational tax schemes used today
International Financial Services Centre ("IFSC") centre of US multinational corporate tax planning
Apple Inc (Ireland) Apple's €13bn EU Commission fine in Ireland is the largest corporate tax fine in history
Offshore Financial Centers: Ireland is the 5th largest global Conduit OFC in corporate tax planning

With 80% of Irish corporation tax ("CT") coming from foreign-owned multinational corporations[1][2], Ireland is considered to have an advanced and competitive corporation tax system (low 12.5% tax rate, broad tax treaty network, tax-free holding company regimes, advanced intellectual property/knowledge box regimes).[3] As a major global conduit OFC,[4] the Irish corporate tax code maintains a high degree of transparency and compliance with EU and OCED guidelines.[5]

Ireland's corporate tax schemes ("double Irish", "single malt" and "capital allowances for intangibles") deliver "effective" Irish CT rates of 0-3%, but only for corporates with substantive "intellectual property" ("IP") (raw material of tax planning[6]). These schemes are also less useful to multinationals from countries with "territorial tax" systems[7] (there are no non-US/non-UK multinationals in the top 50 companies in Ireland).[8] Outside of retailers (i.e. Tesco, Lidl), Ireland's foreign multinationals are US-based (shielding from the pre US TCJA "worldwide tax" system[9]), and from the "IP-heavy" sectors of technology, life sciences and industrial patents.[10][11][8]

Multinational tax schemes distort Irish National economic statistics. By 2011 Irish GNI was only 80% of Irish GDP (vs. 100% for EU average).[12] The EU estimated that 23% of Ireland's GDP from 2010-2015 was untaxed royalties.[13] The distortion reached a climax when Apple "onshored" its controversial ASI subsidiary in January 2015. It led to a 2015 rise in Irish GDP of 26.3%, and in GNP of 18.7%,[14] and received widespread ridule and investor concern in the "leprechaun economics" affair. In 2017, the CBI brought in a new measure, "modified GNI" (or GNI*)[15][16] to address these concerns. Irish 2016 GNI* was 30% below 2016 Irish GDP.[17][18]

The low-tax outcomes of Irish multinational tax schemes have been criticized in Ireland,[19] the EU[20][21][13] and the US.[22][23][24] However, the transparent, and regulatory compliant, nature of Ireland's CT schemes means it enjoys support of the EU[25][26] and the OECD.[27][5][28] Ireland closed the "double Irish"[29] (phaseout to 2020),[30] but opted out of Article 12 of the 2017 OECD Multilateral Convention to protect "single malt".[31] In 2016, the EU Commission levied the largest corporate tax fine in history on Apple's Irish subsidiaries, at €13bn.[32] It is considering 14 other Irish cases.[33] The Irish Government turned down the €13bn, and are appealing.[34]

The 2017 US TCJA moves the US to a modern "territorial tax" system[7] with a low-tax scheme for US-based IP (FDII rate of 13.125% rate on IP), and an anti low-tax scheme for foreign-based IP (GILTI tax can bring non-US IP tax rates above 13.125%).[35][36] In addition, the EU's "digital sales tax" (DST)[37] (and desire to a Common Consolidated Corporate Tax Base ("CCCTB")) also overrides the Irish multinational tax schemes.[38] These new US and EU regimes, combined with the 2020 expiry of the "double Irish" and the "clawback" provisions of Apple's 2015 Irish "capital allowances" scheme, have raised concenrns over Irish corporate tax sustainabililty.[39][40]

Low tax economy[edit]

Ireland's economic model was transformed from a predominantly agricultural based economy to a knowledge-based economy, with the creation of a 10% low-tax "special economic zone" called the "International Financial Services Centre" ("IFSC") in Dublin city centre in 1987.[41][42] The transformation was accelerated when the entire country was "turned into an IFSC", by reducing Ireland's corporate tax rate from 32% to 12.5% (phased in from 1998-2003).[43] The additional passing of the important 1997 Taxes and Consolidated Acts leglislation, laid the legal foundations for many of the "multinational tax schemes" used by foreign multinationals in Ireland today (i.e. "double Irish", "capital allowances" and "Section 110 SPVs") to achieve "effective" Irish CT rates of 0-3%.[44]

Multinational economy[edit]

As a result of these policies, foreign multinationals dominate Ireland's economy. For example, they:

  • Directly employ one-quarter of the Irish private sector workforce;[45]
  • Pay these employees an average wage of €85k (€17.9bn wage roll on 210,443 staff)[10] vs. Irish Industrial wage of €35k;
  • Directly contribute €28.3bn annually in taxes, wages and capital spending;[10]
  • Pay 80% of all Irish corporation and business taxes;[1][46]
  • Potentially pay over 50% of all Irish salary taxes (due to higher paying jobs), 50% of all Irish VAT, and 92% of all Irish customs and excise duties;
    (this was claimed by a leading Irish tax expert (and Past President of the Irish Tax Institute), but is not fully verifiable)[47]
  • Create 57% of private sector non-farm value-add (40% of value-add in Irish services and 80% of value-add in Irish manufacturing);[48][45]
  • Make up 14 of the top 20 Irish companies (by 2017 turnover) (see table below).[8]

Multinational aspects[edit]

There are a number of interesting aspects to foreign multinationals in Ireland:

  • They are mostly US-based. US multinationals are 80% of foreign multinational employment in Ireland (the balances are UK pharmaceutical and UK retailers).[49][10] 14 of Ireland's 20 largest companies (by 2017 turnover) are US-based.[8] There are no non-US/non-UK foreign multinationals in Ireland's top 50 companies by turnover, and only one by employees (No. 41 German retailer Lidl).[8]
    (Note, some lists are compiled by asset size, which includes large SPV type IFSC European financials with billions in assets, but very small employees and turnover)
  • They are very concentrated. The top 20 corporate taxpayers pay 50% of all Irish corporate taxes while the top 10 pay 40% of all Irish corporate taxes.[1][46] Post "leprechaun economics", Apple, Ireland's largest company by turnover, constitutes almost one fifth of Ireland's GDP (Apple's ASI 2014 profits of €34bn per annum, are almost 20% of Irish GNI*).[50][51][52]
  • They are mostly technology and life sciences. To use Ireland's "multinational tax schemes", a multinational needs to have "intellectual property" (or "IP"),[6] which is then converted into "intellectual capital" and "royalty payments" plans, to move funds from high-tax locations. Most global IP - and multinationals in Ireland - is concentrated in these two sectors.[8][1]
  • They use Ireland to shield non-US profits from the US "worldwide tax system". Non-US multinationals hardly use Ireland (none in the top 50 Irish firms[8]). This is because their home countries have "territorial tax" systems with lower rates on foreign income.[7] Pre the 2017 TCJA, US multinationals used Ireland to shield all non-US income, not just European, from the US "worldwide tax" system.[9]
  • They artificially inflate Irish GDP by 50%. The tax plans of multinationals distort Irish GDP (and GNP).[48] The EU found 23% of Irish 2010-2014 GDP was "royalty payments" (ratio of GNI to GDP was 77%).[13] Post Apple's "leprechaun economics" re-structuring,[17][18] it is estimated Irish GDP is 150% of Irish GNI (vs. 100% in EU-28).[53][54] The CBI has proposed replacing GDP with modified GNI.
  • They pay effective tax rates of 0-3%. Irish Revenue Commissioners quote an "effective" CT rate of 9.8%,[1], but this omits income deemed not taxable. The US Bureau of Economic Analysis ("BEA") gives an "effective" Irish CT rate of c. 2.5%.[46][43] The BEA approach agrees with the known rates of Apple and Google (<1%),[55][56], and the CT rates of the main "multinational tax schemes" (0-3%).

Multinational job focus[edit]

Ireland's low-tax system emphasises job creation. To avail of the Irish "multinational tax schemes" (see below), which deliver "effective" Irish tax rates of 0-3%, the multinational must meet conditions on the "intellectual property" ("IP") they will be using as part of their scheme. This is outlined in the Irish Finance Acts particular to each scheme, but in summary, the multinational must:[57][58]

  • Prove that they are carrying out a "relevant trade" on the IP in Ireland (i.e. Ireland is not just an "empty shell" through which IP passes on route to a tax-haven);
  • Prove that the level of Irish employment doing "relevant activities" on the IP is consistent with the Irish tax relief being claimed (the exact ratio has never been disclosed);
  • Show that the average wages of the Irish employees are consistent with such a "relevant trade" (i.e. must be "high-value" jobs earning +€60,000-€90,000 per annum);
  • Put this into an approved "business plan" (agreed with Revenue Commissioners and other State bodies), for the term of the tax relief scheme;
  • Agree to suffer "clawbacks" of the tax relief granted (pay the full 12.5% level), if they leave before the end plan (at least 5 years for schemes started after February 2013)[3]

The IDA Ireland disclosed 2016 foreign multinational figures of €17.9bn wage roll on 210,443 staff, or €85k per employee ("high-value" jobs).[10]

In practice, there are few cases of US technology multinationals conducting material software engineering/programming work in Ireland. The "high-value" Irish jobs tend to be "localisation" work (i.e. converting software into different languages) or "sales and marketing" work. These are sufficient to meet the Irish Revenue Commissioners criteria for a "relevant trade" and "relevant activities".[59]

The % of Irish wage-roll to Irish gross profits has never been disclosed. However, commentators imply wage-roll needs to be circa 2-3% of gross shielded profits (i.e. a tax of 2-3%)

For example:

  • Apple employed 6,000 people in 2014, and at say €100,000 cost per employee gives a €600m wage roll on ASI 2014 gross profits of €25bn (see table below),[60] or 2.4%
  • Google employed 2,763 people in 2014, and at say €100,000 cost per employee gives a €276m wage roll on Google 2014 gross profits of €12bn,[61] or 2.3%

Tax system (March 2018)[edit]

Tax rates[edit]

There are two rates of corporation tax ("CT") in the Republic of Ireland:[62][3][63][64]

  • 12.5% for trading income (or active businesses income)
  • 25% for non-trading income (or passive income) covering investment income, rental income, net profits from foreign trades, and income from certain land dealings and oil, gas and mineral exploitations.

The "special rate" of 10% for companies involved in manufacturing, the International Financial Services Centre (IFSC) or the Shannon Free Zone ended on 31 December 2003.[65]

Key aspects[edit]

  • Low rate - At 12.5%, Ireland has one of the lowest corporate tax rates in Europe (Hungary 9% and Bulgaria 10% are lower) and half the OECD average (24.9%).[3][66]
  • Highly transparent/compliant - As a CT system used by major multinationals as a global Conduit OFC for tax management, it is fully compliant with EU/OECD guidelines.[5][28][26]
  • Worldwide system - Post the US 2017 TCJA, Ireland is one of 6 remaining OECD countries using a "worldwide tax system" (Chile, Greece, Ireland, Israel, South Korea, Mexico).[3][67]
  • No thin capitalisation - Ireland has no "thin capitalisation" rules (which means Irish corporates can be financed with 100% debt).[63]
  • "Double Irish" residency - Pre January 2015, Irish CT was based on where a company was "managed and controlled" (vs. registered), this "double Irish" system ends in 2020.[3][63]
  • "Single Malt" residency - While double Irish was closed in 2015, it can be recreated by "managed and controlled" wordings in selective Irish tax treaties (i.e. Malta, UAE).[3][63]
  • Extensive treaties - As of March 2018, Ireland has double-tax treaties with over 73 countries (the 74th, Ghana, is pending).[68][3]
  • Holding company regime - Built for corporate inversions, enables Irish based "holding companies" gain full tax relief against withholding taxes, foreign dividends and CGT.[63][3]
  • Intellectual property regime - Built for technology firms, recognises a wide range of "intellectual assets" that can be depreciated against Irish tax (over 5 years, post-February 2013).[3]
  • First OECD KDB - Ireland created the first OECD compliant Knowledge Development Box in 2016 to further support it's "intellectual property regime".[3]

Key statistics[edit]

(As at the 2017 Revenue Commissioners, and the office of Comptroller & Auditor General, reports into 2016 Irish corporation tax ("CT"))[1][46]

  • Irish corporation 2016 CT was €7.35bn, which is 15% of total Irish exchequer taxes (vs. 7.7% for OECD average) and 2.7% of Irish GDP (vs. 2.7% OCED average).[1][46]
    (Note: Irish GDP, post the "leprechaun economics" affair is considered unreliable. Irish GNI* (30% below Irish GDP) is preferred by the Central Bank of Ireland).
  • Over 80% of Ireland's corporate tax from 2010-2016[2], and in 2016 alone[1], came from foreign owned multinationals based in Ireland.[69]
    (Note: IDA Ireland state that US-owned multinationals represent almost 80% of multinational employment in Ireland, thus implying US multinationals are circa 64% of CT revenues)
  • The top 20 multinationals provide almost half of all Irish corporate taxation, while the top 10 provide circa 37% (up from 16%, 17% in 2006, 2007).[1][70][2]
  • Three sectors make up over 70% of CT - Finance & Insurance (which can relate to IT), Manufacturing (mostly pharmaceutical) and Information Technology.[46]
    (Note: It is not possible to separate out the financing companies (appear under Finance & Insurance), of the US technology multinationals)
  • The increasing concentration of Irish CT around a handful of (mostly US) multinationals has been noted as a risk factor by the "Irish Fiscal Advisory Council"[71]
  • Ireland's "headline" CT rate is 12.5%, but the "effective" CT rate is between 2.5% to 15.5% depending which of 8 identified methods are used (and what is "excluded" from taxable income).[46]
    (Note: "Effective" 2015 CT rate" of 9.8% from the Irish Revenue Commissioners excludes large amounts of income not considered "taxable" under the various "multinational tax schemes".[55]

Recent trends[edit]

Up until 2014, Irish CT yearly returns (see "yearly returns" below) had been growing steadily with the Irish economic recovery. At just over €4.61bn in 2014, Irish CT returns were still below the pre-crisis levels of circa €5-6bn. Irish CT as a % of total Irish taxation was just over 10%.[46]

In 2015, at the same time that Apple has created the "leprechaun economics" moment, Irish CT jumped materially to €6.87bn (a €2.26bn, or 49% increase, in one year).[1][46] It was noted that Finance Minister Michael Noonan made Apple's 2015 "capital allowances" scheme effectively tax-free by increasing the cap in the 2015 Irish Budget to 100% (reversed back in 2017 but only for new schemes).[72] It was also noted that Apple's main Irish subsidiary, ASI, was recording gross profits of €25bn in 2014,[50] while the total rise in 2015 intangible assets claimed under Irish capital allowances was €26.220bn.[1]

Just as with the initial leprechaun economics moment in 2015, commentators believe that a material amount of this CT jump (if not almost all) is due to Apple, and more than ASI was re-structured into Ireland, however, we may never know the exact answer. The "clawback" on Apple's new "capital allowances" scheme expires in January 2020 (5-year term[62]). At the time of the CT jump disclosure, the Irish Government commissioned a major study into Irish CT sustainability which confirmed visibility to 2020 but not beyond.[39][40][73]

Multinational tax schemes[edit]

Mostly US multinationals[edit]

The tax planning schemes used by multinationals in Ireland require substantial amounts of "intellectual property" ("IP"), which is converted into "royalty payment" ("RP") schemes in order to move profits between jurisdictions. IP is described as the "raw material" of corporate tax avoidance.[6] Irish "capital allowances" schemes, additionally allow IP to be converted into "intangible assets" ("IA"), which can be "onshored" into Ireland (i.e. like a quasi-corporate inversion), and then written off against almost all Irish tax (effective tax rate of 0-3%) in perpuity (the IP is renewed on each product cycle).

The requirement for high levels of IP limits the use of Irish corporate tax schemes to the the four main industries that produce the most "IP" in the world, namely, technology (Apple, Google, Microsoft, Dell), pharmaceutical (Allergan, Pfizer, Perrigo), medical devices (Medtronic, Stryker, Boston Scientific) and specific Industrials who have technology patents (Eaton, Ingersol Rand).

In addition, non-US multinationals tend to have "territorial tax systems" in their home country which can apply lower separate tax rates on foreign sourced income (to incentivise these companies to stay "home").[7][9] Prior to the 2017 US TCJA, the US was one of the last of 7 jurisdictions to operate a "worldwide tax system" which applied a single high rate of tax on all income.

This is why the main foreign multinationals in Ireland are (a) US multinationals and, (b) from these four, "IP heavy", industries.[11][8]

IDA Ireland notes that 80% of the 210,443 Irish employees in foreign-owned firms, are from US-based multinationals.[49][10]. The other foreign multinationals are UK corporate inversions that ceased from 2009 (Shire plc was the last in 2008), when the UK moved to a full "terroritial tax system" and reduced its CT rate to 19%. The rest are UK retailers active in the Irish market (Tesco plc).[74][7][75]

There are no non-US/non-UK foreign multinationals in Ireland's top 50 companies by 2017 turnover, and only one by employees (No 41 German retailer, Lidl).[8]

2017 Top 20 Irish companies (by Irish turnover)[8]

Royalty payment schemes[edit]

Est. ASI Irish Taxes (2014-2004) Mr. Seamus Coffey

Double Irish is a structure used by US corporations (Apple, Google, Microsoft and Oracle) in Ireland, to get to effective tax rates <1% on non-US income.[76][55][56] As the conduit by which US corporations built up offshore reserves of $1trn [77][78] the "double Irish" is the largest recorded corporate tax avoidance in economic history.[79]

IFSC PwC Partner, Feargal O'Rourke (son of Minister Mary O'Rourke, cousin of Finance Minister Brian Lenihan Jnr) is regarded as its "grand architect".[80][81][82][83]

From the mid-2000s, US multinationals increased use of the Irish "double Irish" tax scheme (see table for Apple's ASI, by 2014 was circa 20% of Irish GNI*).[84]

Royalty schemes are subject to the “relevant trade” and “relevant activities” criteria mentioned above (see “multinational job focus” above).

In 2015, after EU and OECD pressure,[85] the Irish Government shut-down the double Irish by preventing an Irish registered company to be tax resident elsewhere (i.e. IRL2). Existing double Irish structures could continue until 2020.[30] Despite this, US corporate activity in Ireland increased post shut-down.[31]

It since emerged that a new single malt structure replaced the double Irish in 2015 (IRL2 is instead re-located to Malta, with the same effect).[86][87] It is contended that the Irish Government's June 2017 decision to opt out of Article 12 of the OECD Multilateral Convention[88] was to protect single malt.[31]

Capital allowances schemes[edit]

The 2009 Irish Finance Act, materially expanded the range of intangible assets that could attract Irish "capital allowances" which are deductible against Irish taxable profits.[89][90] These "specified intangible assets" [91] cover more esoteric intangibles such as types of general rights, general know-how, general goodwill, and the right to use software.[92] It includes types of "internally developed" intangible assets and intangible assets purchased from "conntected parties". The control is that they must be acceptable under GAAP (old Irish GAAP is accepted) and thus approved by an IFSC accounting firm.[89][90]

Instead of the double Irish arrangement, where IP assets are charged to Ireland from an offshore location (or Malta location for single malt), the Irish subsidiary can now buy the IP assets, using an inter-company loan, and then write-off the full acquisition cost over a fixed period (the period is what is in the GAAP accounts), against Irish pre-tax profits to give a 0-3% effective CT rate over the period (depending on cap relief being 80% or 100%[72]). As the "product cycle" of the IP develops, new IP is created and then purchased by the Irish subsidiary, keeping the scheme going in perpetuity.

There is a "clawback" provision that if the multinational leaves Ireland within 5 years, all the allowances are repayable (for schemes started after February 2013)[3]

Capital allowance schemes are subject to the “relevant trade” and “relevant activities” criteria mentioned above (see “multinational job focus” above).[57][58]

When Apple, one of the largest users of Irish tax structuring arrangements in the world, was re-structuring its controversial Irish subsidiaries in January 2015 (from the EU Commission €13bn ruling, see above), it chose this Irish "capital allowances" arrangement rather than use a double Irish arrangement (which Apple could have legitimately done in January 2015).[50]

Distortion of GNI/GNP/GDP[edit]

EU 2011 Ratio of GNI to GDP (Eurostat National Accounts, 2011)

The "royalty schemes" distort Irish GDP and the later versions also distort Irish GNP and Irish GNI.

By 2011, Ireland's ratio of GNI to GDP, had fallen to 80% (only Luxembourg was lower at 73%). The EU27 average is closer to 100% (see table).[12][48]

An EU Commission report showed that from 2010 to 2015, over 23% of Ireland's GDP was represented by untaxed multinational net royalty payments.[13]

Irish financial commentators note how difficult it is to draw comparisons with other economies.[48] The classic example is the comparison of Ireland's indebtedness (Public and Private) when expressed "per capita" versus when expressed "as % of GDP". On a 2017 "per capita" basis, Ireland is one of the most leveraged OECD countries (both on a Public Sector and on a Private Sector Debt basis). On a 2017 "% of GDP" basis, however, Ireland is deleveraging rapidly.[93][94][95][96]

However, "capital allowances" schemes have an even more profound effect on GNI/GNP/GDP, as the IP asset is brought into the Irish economy (i.e. the IP is fully front loaded) and present more like quasi-corporate inversions in the Irish National statistics (but again, without any real tax revenues).

Leprechaun economics[edit]

Finance Minister Michael Noonan

The distortion of Irish GNI/GNP/GDP came to a climax when Apple restructured its controversial ASI subsidiary (which EU Commission had judged as receiving illegal Irish State Aid) in January 2015, and brought it "onshore" to Ireland via a new "capital allowances" scheme.[50]

Apple's restructuring led to 2015 Irish economic growth rates of 26.3% (GDP) and 18.7% (GNP) respectively.[14]

This led to widespread Irish and International riducle[97][98][99][100][101][102][103][104], and was labelled by Noble Prize economist Paul Krugman as "leprechaun economics".[105]

Markets saw Finance Minister Michael Noonan "pay" €380m in additional annual EU GDP levies[106][107] (he had made Apple's 2015 new Irish "capital allowance" scheme free of Irish taxes in the 2015 Budget by lifting the cap to 100%),[72] to generate "artificial" increases in the Irish GDP, GNP and GNI economic statistics.

His predessor, Finance Minister Paschal Donohoe immediately closed the 2015 Budget loophole to ensure that "capital allowances" schemes would at least pay effective Irish corporate tax rates of 2-3% (by reducing the cap on relief back to 80% from Noonan's 100% level). However, he only applied this to new schemes.[72]

While financial markets had always been wary of Irish economic data, Noonan's actions severally damaged their confidence.[108]

Introduction of GNI*[edit]

In response to the collapse in confidence, the Governor of the Central Bank of Ireland, Philip R. Lane, convened a special steering group (Economic Statistics Review Group) to recommend new economic statistics that would better represent the true position of the Irish economy.

The result was the creation of a new metric, "modified Gross National Income" (or GNI* for short). The difference between GNI* and GNI due to having to deal with two problems (a) The retained earnings of re-domiciled firms in Ireland (where the earnings ultimately accrue to foreign investors), and (b) depreciation on foreign-owned capital assets located in Ireland, such as intellectual property (which inflate the size of Irish GDP, but again the benefits accrue to foreign investors).[109][110]

Post "leprechaun economics", 2016 Irish GNI* (€190bn) is 30% below 2016 Irish GDP (€275bn) and Irish Debt/GNI* goes to 106% (Irish Debt/GDP was 73%).[17][18]

Given that pre "leprechaun economics", Irish GNI (which is affected by the "capital allowances for intangibles" scheme[54]), was more than 20% below Irish GDP, commentators expected post "leprechaun economics", Irish GNI* would be circa 40% below Irish GDP.[54][53]

Even with GNI*, a material level of "distortion" remains in Irish National Accounts (i.e. gap between GNI* and "true" GNI)[54] from US multinational corporate tax schemes.

Corporate tax inversions[edit]

Ireland's "holding company" regime makes it a destination for corporate tax inversions, a strategy in which a, mostly, US-based company, takes over an Irish-based company, and then shifts its legal place of incorporation overseas to Ireland, (but not its majority ownership, headquarters or executive management, who can stay in the US),[111] to avail of Ireland's low corporate tax rates.[112][113]

The US tax code prohibits a US company creating a new "legal" headquarters in Ireland, while leaving the "real" executives in the US, under US anti-avoidance tax rules. However, where the movement is part of an acquisition, it is allowed.[114] The US company can then permanently avoid US taxes on non-US income and, can also use Irish "multinational tax" strategies to reduce US taxes on US income.[115]

Of the 85 inversions of US corporations that have occurred since 1982, Ireland has been the most popular destination, attracting almost a quarter (or 21 inversions):[114]

Ireland's first US inversion was Tyco in 1997, however the last 5 years have been dominated by US pharmaceuticals:[114][113]

The largest existing Irish US inversions are (showing market cap in October 2015 and year of inversion):[116]

Ireland has also been a recipient of UK inversions, the last one being Shire Pharma in 2008,[117] until the UK moved to a "terrorital tax" system.[74][7][75]

Corporate tax inversions differ from the "multinational tax schemes" (above) in that the corporate "legally" onshores to Ireland (it affects GNP and GNI as well as GDP). Usually, the inversion will be accompanied by an Irish multinational tax scheme, like "capital allowances for intangibles", to reduce the Irish headline 12.5% CT rate to closer to low single digits.

The Irish Central Statistics Office ("CSO") describe this effect on the Irish National Accounts as follows:

Redomiciled PLCs in the Irish Balance of Payments: Conducting little or no real activity in Ireland, these companies hold substantial investments overseas. By locating their headquarters in Ireland, the profits of these PLC’s are paid to them in Ireland, even though under double taxation agreements their tax liability arises in other jurisdictions. These profit inflows are retained in Ireland with a corresponding outflow only arising when a dividend is paid to the foreign owner.

— Central Statistics Office (Ireland), July 2017[118]

It is asserted that the threat of such inversions, is what led to the informal system of the US Government allowing US corporates to use Irish "multinational tax schemes", and looser "controlled foreign corporation" rules, to avoid all taxes on non-US income (given how high the traditional US corporate tax rate used to be).[119] It was the EU who forced the closure of the "double Irish", not the US.[29]

US inversions artificially bolster Irish GDP/GNP/GNI growth (Ireland's advanced "holding company" regime means the inverted company pays low rates of Irish CT), but is politically controversial in the US because it lowers U.S. tax revenue.[113] In April 2016, the U.S. government announced new rules in a bid to reduce the economic incentives to perform corporate tax inversions.[113] The changes in U.S. policy caused a planned $160bn merger between the U.S. pharmaceutical company Pfizer and the Irish pharmaceutical company Allergan, the largest inversion in history, to be dropped.[120][121]

The Trump administration has so far kept the Obama era rules blocking further inversions in place.[122]

It is asserted that the new Tax Cuts and Jobs Act of 2017 will reduce the driver for US inversions[123] and in particular the move to a territorial tax system[75] and an attractive low-tax IP taxation regime.[124][125] There is a belief that the TCJA could even attract inversions (and IP) back to the US (as similar rules did in the UK in 2009-2012[7]). However, the Irish (and the UK) ultra-low-tax schemes could still attract US corporate inversions.[126] For example, the TCJA's new GILTI regime enforces a minimum 10.5% tax rate on IP-heavy US corporates, whereas Apple and Google pay <1% on profits in Ireland.[55][56]

Section 110 company[edit]

An Irish Section 110 Special Purpose Vehicle ("SPV") is an Irish tax resident company, which qualifies under Section 110 of the Irish Taxes Consolidation Act 1997 (“TCA”), by virtue of restricting itself to only holding "qualifying assets", for a special tax regime that enables the SPV to attain full tax neutrality (i.e. the SPV pays no Irish corporate taxes).

Section 110 was created to help International Financial Services Centre ("IFSC") legal and accounting firms compete for the administration of global securitisation deals. They are the core of the IFSC structured finance regime[127] and the largest SPVs in EU securitisation[128]. Section 110 SPVs have made the IFSC the 4th largest global shadow banking centre.[129] They pay no Irish taxes but contribute circa €100m annually to the Irish Economy from fees paid to IFSC legal and accounting firms.[130]

Section 110 SPVs have been the subject of controversy. In 2016, it was discovered that US distressed debt funds used Section 110 SPVs, structured by IFSC service firms[131], to avoid material Irish taxes[132][133][134] on domestic Irish activities, [135][136] while mezzanine funds were using them to lower clients corporate tax liability.[137][138] Academic studies in 2017 note that Irish Section 110 SPVs operate in "brass plate" fashion[139] with little regulatory oversight from the Irish Revenue or Central Bank of Ireland[140], and have been attracting funds from undesirable activities.[141][142][143][144][145][146]

Knowledge development box[edit]

Ireland created the first OECD compliant Knowledge Development Box ("KDB"), in the 2015 Finance Act, to further support it's "intellectual property regime".[3][147] The KDB behaves like a "capital allowances for intangible assets" type scheme with a cap of 50% (i.e. similar to getting 50% relief against your "capitalisation allowances" IP for an "effective" Irish tax rate of 6.25%). As with the "capital allowances" scheme, the KDB is limited to specific "qualifying assets", however, unlike "capital allowances", these are quite narrowly defined by the 2015 Finance Act.[148][149]

The Irish KDB has started off with tight conditions on use to ensure full OECD compliance (and thus adherence to the OECD's "modified Nexus standard" for IP[150]), and therefore OECD support. This has drawn criticism from Irish professional advisory firms who feel that its use is limited to pharmaceutical (who have the most "Nexus" compliant patents/processes), and some niche sectors.[151][152].

However, it is expected that these conditions will be relaxed over the next decade through refinements of the 2015 Finance Act. This is a route taken by other Irish tax schemes such as:

  • "Double Irish" - the concept of a different definition of Irish "tax residence" was introduced in 1997 Taxes and Consolidation Act ("TCA"), but expanded in 1999-2003 Finance Acts.[153]
  • "Single Malt" - the "double Irish" tax residence terminology around "management and control", but entered directly into specific bi-lateral tax treaties (Malta, UAE).[31]
  • "Capital Allowances for Intangibles" - introduced in 1997 TCA but materially expanded in 2009 Finance Act,[3] and made tax-free in the 2015 Finance Act.[72]
  • "Section 110 SPVs" - introduced in 1997 TCA but Irish anti-avoidance rules, and domestic abuse controls, eroded in 2003, 2008, 2011 Finance Acts (see the main Section 110 article).

It is expected that the KDB terms will ultimately be brought into alignment with the broader "capital allowances for intangible assets" terms in the future.[154]

Corporate tax haven[edit]

Global Conduit OFC[edit]

Uncovering Offshore Financial Centers: Ireland is the 5th largest global Conduit OFC

Ireland's low corporate tax strategy has led to a rise in league tables of tax havens[155][23][156][157] and seen Ireland "black listed" by countries such as Brazil.[158][159]

In contrast, the Irish Government, and many respected Irish and International financial commentators, counter that Ireland operates in a fully transparent corporate legal and regulatory system that is well regarded by both the EU and the OECD.[160][161][162][163]

A new report published in Nature in 2017 on the analysis of offshore financial centres "Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network"[4] explains the disconnect between these two sets of contrasting views.

The report analysed 91 million corporate connections to identify 5 global Conduit OFCs (Netherlands, United Kingdom, Ireland, Singapore and Switzerland). These are countries which are not formally labelled "tax havens" (by EU/IMF/OECD), but who have "advanced" legal and tax structuring vehicles (and SPVs) that can legally route funds to 24 tax havens (called Sink OFCs), without incurring tax in the Conduit OFC (or tax at the source of funds , where royalty payment schemes can be used).[4]

Conduit OFCs tend to be dominated by specialist law and accounting firms (who have offices in Sink OFCs[164][165]), who create the lawfully constructed vehicles that make the Sink OFC connections, by exploiting legislative loopholes. They advise clients on anticipating future changes (i.e. from slow moving OECD BEPS processes) that may need new loopholes,[166] and lobby heavily/write most of, the State's relevant SPV legislation (where they create the new loopholes).[4][167][168][154]

Further work by acclaimed tax haven author Gabriel Zucman, shows that this report still underestiates Ireland's position as possiblly the largest global conduit OFC in the world.[24][169]

Apple tax ruling[edit]

International awareness of Ireland's role in corporate tax avoidance escalated further when on 29 August 2016, after a two-year EU investigation, Margrethe Vestager of the European Commission announced Apple Inc. received undue tax benefits from Ireland. The Commission ordered Apple to pay €13 billion, plus interest, in unpaid Irish taxes for 2004 to 2014.[170] This is the biggest tax fine in history.[171]

The issue is Apple's unique variation of the double Irish tax system which, up to end 2014, it used to shield circa €110bn[172] of non-US profits from tax. Apple did not use the standard two Irish companies (as Google and other Irish based US multinationals employ) but received rulings from the Irish Revenue that it could use one Irish company (mainly Apple Sales International ASI), split into two "branches". This was not a ruling given to other Irish based US multinationals and is therefore charged as being illegal Irish State Aid.[173]

It was shown in 2018 that Apple's subsequent re-structuring of its Irish subsidiaries in January 2015 was the driver of the Irish "leprechaun economics" 2015 GDP growth. It additionally highlighted that Apple is now using the new Irish "capital allowances for intangible assets" arrangement[50] to avoid taxes on non-US profits. The manner in which Apple executed this new scheme could be subject to further EU challenge and fines of a similar magnitude (see further potential Apple litigation),[174] and EU Commission are now investigating.[175]

International counter measures[edit]

Under pressure from the EU[29], Ireland was forced to close the "double Irish" in 2015 (it remains in place for existing Irish multinationals until 2020[30]). However, Ireland opted out of Article 12 of the OECD Multilateral Convention which allowed it to protect its replacement "single malt" system.[31] Ireland is still a strong supporter of the slow moving OECD tax reform process.[176]

In April 2016, the US government announced new rules to block US corporate tax inversions.[113] The changes in US policy caused a planned $160bn merger between the U.S. pharmaceutical company Pfizer and the Irish pharmaceutical company Allergan, the largest inversion in history, to be dropped.[120][121] The Trump administration has so far kept the Obama era rules blocking further inversions in place.[122]

The EU Commission's August 2016 ruling against Apple in Ireland was also seen as an attempt to curb perceived abuses by US technology firms of European taxation systems.[32] The Commission has been going through all Irish Revenue rulings to multinationals and more cases may ensue (they have mentioned 14 other rulings).[33][13]

Parts of the December 2017 US TCJA are targeted at Irish "multinational tax schemes".[177][178] The FDII rate gives US multinationals an "Irish type" low tax rate (13.125%) for their royalty schemes created from intellectual assets. The GILTI rate ensures that the Irish "multinational tax schemes" (which give effective Irish corporate tax rates close to 0%), produce effective US tax rates above the FDII.[179][36] (it is not confirmed if the EU's proposed 3% digital tax (and effective tax rate of 10-15%) would even be eligible for relief against the 10.5% US GILTI tax, as it is a revenue-tax and not a profits-tax).[180]

The EU's 2018 "digital services tax"[37] targets Irish "multinational tax schemes" as used by US technology firms.[38][181] As with the US TCJA GILTI rate, the EU's DST is designed to "override" Ireland's tax structures and force a minimum level of EU tax on US technology firms.[180] The EU's proposed 3% revenue tax will translate into an effective 10-15% tax rate (depending on pre-tax margins of 20-30% for Apple, Google and Microsoft), and is expensible, so it will reduce net Irish tax.[182] The EU's Common Consolidated Corporate Tax Base ("CCCTB"), would even more severely affect Ireland.[183][184][185]

Risks beyond 2020[edit]

A number of Irish "multinational tax schemes", and international counter-measures to combat them, come to a head in 2020:

  • "Double Irish" scheme fully expires (although the "single Malt" could replace it unless also addressed by the EU).[30]
  • "Clawback" penalty of major "capital allowances for intangibles" schemes expire; especially Apple's massive 2015 scheme (5 years for schemes after Feb 2013).[186]
  • US TCJA GILTI penalty rate rises from 2020 to 2025; certain foreign taxes may not be eligible for relief giving effective Irish tax rates well above 13.125%.[187]
  • EU "digital services tax" (DST) scheme could be in place (1 January 2020),[37] and its rate could be used as leverage to bring in the more substantive CCCTB tax reform.[183]
  • The Max Schrems "Europe vs Facebook" data protection case, could force Facebook (and Google), to move some of their Irish business back to the US (under US data laws).[188]
    (for example, due to the 2018 EU General Data Protection Regulations ("GPDR"), Facebook is moving non-EU customers hosted in Ireland (1.5bn of Ireland's 1.9bn accounts), to the US).[189]

In response to concern about this, the Irish Government commissioned a major study on the sustainability of its Corporate Tax System in 2016 by University College Cork economist Seamus Coffey[39][40][73] which recommended scaling back of some corporate tax incentive schemes (i.e. reducing "capital allowances for intangible assets" to an 80% cap so that an effective Irish Corporation tax rate of 2-3% is paid).

Yearly returns[edit]

The key trends in yearly CT revenue are:

  • Foreign multinationals dominate, paying circa 80% of CT revenue (notwithstanding that there are large Irish players like CRH plc, Ryanair plc, and Kerry Group plc).
  • Note that IDA Ireland claims that US firms represent circa 80% of foreign employees[49][10], implying that US firms are circa 64% of CT revenue.
  • The "leprechaun economics" moment in 2015 where Apple caused a material lift in CT (see above)
  • Post Apple, CT revenue as a % of Total Tax revenue is close to past peak of over 16%
  • The concentration of the top 10 CT payers has risen materially post the crisis (Irish banks stopped paying CT and US multinationals grew).

2001 to present (Euro bn)[edit]

Calendar
Year
Corporation
Tax Revenue
Total
Tax Revenue
CT % of Total
Tax Revenue
Top 10 Payer
% of CT[1]
Foreign Payer
% of CT[1]

Reference
2001 4.16 27.93 14.9% .. .. [190] (restated)
2002 4.80 29.29 16.4% .. .. [190]
2003 5.16 32.10 16.1% .. .. [191]
2004 5.33 35.58 15.0% .. .. [192]
2005 5.49 39.25 14.0% .. .. [193]
2006 6.68 45.54 14.7% 17% .. [194]
2007 6.39 47.25 13.5% 16% .. [195]
2008 5.07 40.78 12.4% 18% .. [196]
2009 3.90 33.04 11.8% 35% .. [197]
2010 3.92 31.75 12.4% 32% circa 80% [198]
2011 3.52 34.02 10.3% 39% circa 80% [199]
2012 4.22 36.65 11.5% 34% circa 80% [200]
2013 4.27 37.81 11.3% 36% circa 80% [201]
2014 4.61 41.28 11.2% 37% circa 80% [202]
2015 6.87 45.13 15.2% 41% circa 80% [1]
2016 7.35 49.02 15.0% 37% circa 80% [1]

History[edit]

Ireland's corporate tax code has gone through distinct phases of development, from building a separate dentify from the British system, to most distinctively, post the creation of the Irish International Financial Services Centre ("IFSC") in 1987, becoming a "low tax" knowlegdge based (i.e. focus intgangible assets) multinational economy.[203] This has not been without controversy and complaint from both Ireland's EU partners[20][19][21], and also from the US (whose multinationals, for specific reasons, comprise almost all of the major foreign multinationals in Ireland).[22][23]

Post-independence under Cumann na nGaedheal[edit]

It was only with the acceptance of the Anglo-Irish Treaty by both the Dáil and British House of Commons in 1922 that the mechanisms of a truly independent state begin to emerge in the Irish Free State. In keeping with many other decisions of the newly independent state the Provisional Government and later the Free State government continued with the same practices and policies of the iriash administration with regard to corporate taxation.

This continuation meant that the British system of "corporate profits taxation" ("CPT") in addition to income tax on the profits of firms was kept. The CPT was a relatively new innovation in the United Kingdom and had only been introduced in the years after World War I, and was widely believed at the time to have been a temporary measure. However, the system of firms being taxed firstly through income taxed and then through the CPT was to remain until the late seventies and the introduction of Corporation Tax, which combined the income and corporation profits tax in one.

During the years of William Cosgrave's governments, the principal aim with regard to fiscal policy was to reduce expenditure and follow that with similar reductions in taxation. This policy of tax reduction did not extend to the rate of the CPT, but companies did benefit from two particular measures of the Cosgrave government. Firstly, and probably the achievement of which the Cumann na nGaedheal administration was most proud, was the reduction by 50% in the rate of income tax from 6 shillings in the pound to 3 shillings. While this measure benefited all income earners, be they private individuals or incorporated companies, a number of adjustments in the Finance Acts, culminating in 1928, increased the allowance on which firms were not subject to taxation under the CPT. This allowance was increased from £500, the rate at the time of independence, to £10,000 in 1928. This measure was in part to compensate Irish firms for the continuation of the CPT after it has been abolished in the United Kingdom.

A measure which marked the last years of the Cumann na nGaedheal government, and one that was out of kilter with their general free trade policy, but which came primarily as a result of Fianna Fáil pressure over the 'protection' of Irish industry, was the introduction of a higher rate of CPT for foreign firms. This measure survived until 1948, when the Inter-Party government rescinded it, as many countries with which the government was attempting to come to double taxation treaties viewed it as discriminatory.

Fianna Fáil under Éamon de Valera[edit]

The near twenty years of Fianna Fáíl government between from 1931 to 1948, cannot be said to have been a time where much effort was expended on changing or analysing the taxation system of corporations. Indeed, only one policy sticks out during those year of Fianna Fáil rule; being the continued reduction in the level of the allowance on which firms were to be exempt from taxation under the CPT, from £10,000 when Cumman na nGaehael left office, to £5,000 in 1932 and finally to £2,500 in 1941. The impact of this can be seen in the increasing importance of CPT as a percentage of government revenue, rising from and less than 1% of tax revenue in the first decade of the Free State to 3.64% in the decade 1942–43 to 1951–52. This increase in revenue from the CPT was due to more firms being in the tax net, as well as the reduction in allowances. The increased tax net can be seen from the fact that between 1932–33 and 1938–39, the number of firms paying CPT increased by over 33%. One other aspect of the Fianna Fáil government which bears all the fingerprints of Seán Lemass, was the 1946 decision to allow mining companies to write off all capital expenditure against tax over five years.

Seán Lemass and an Irish tax system[edit]

The period between after the late 1950s and up to the mid-1970s can be viewed as a period of radical change in the evolution of the Irish Corporate Taxations system. The increasing realisation of the government that Ireland would be entering into an age of increasing free trade encouraged a number of reforms of the tax system. By the mid-1970s, a number of amendments, additions and changes had been made to the CPT, these included fifteen-year tax holidays for exporting firms, the decision by the government to allow full depreciation in 1971 and in 1973, and the Section 34 of the Finance Act, which allowed total tax relief in respect of royalties and other income from licenses patented in Ireland.

This period from c.1956 to c.1975, is probably the most influential on the evolution of the Irish corporate tax system and marked the development of an 'Irish' corporate tax system, rather than continuing with a version of the British model.

This period saw the creation of Corporation Tax, which combined the Capital Gains, Income and Corporation Profits Tax that firms previously had to pay. Future changes to the corporate tax system, such as the measures implemented by various governments over the last twenty years can be seen as a continuation of the policies of this period. The introduction in 1981 of the 10% tax on manufacturing was simply the easiest way to adjust to the demands of the EEC to abolish the export relief, which the EEC viewed as discriminatory. With the accession to the EEC, the advantages of this policy became increasingly obvious to both the Irish government and to foreign multi-nationals; by 1982 over 80% of companies who located in Ireland cited the taxation policy as the primary reason they did so.

Charles Haughey low-tax economy (1987-2009)[edit]

The Irish International Financial Services Centre ("IFSC") was created in Dubin in 1987 by Taoiseach Charles Haughey with an EU approved 10% special economic zone corporate tax rate for global financial firms within its 11-hectare site. The creation of the IFSC is often considered the birth of the Celtic Tiger and the driver of its first phase of growth in the 1990s.[42][41]

In response to EU pressure to phase out the 10% IFSC rate by the end 2005, the overall Irish corporation tax was reduced to 12.5% on trading income, from 32%, effectively turning the entire Irish country into an IFSC.[203] This gave the second boost to the Celtic Tiger from 2000 up until the Irish economic crisis in 2009.[44][43]

In the 1998 Budget (in December 1997) Finance Minister, Charlie McCreevy[203] introduced the legislation for a new regime of corporation tax that led to the introduction of the 12.5% rate of corporation tax for trading income from 1 January 2003. The legislation was contained in section 71 of the Finance Act 1999 and provided for a phased introduction of the 12.5% rate from 32% for the financial year 1998 to 12.5% commencing from 1 January 2003. A higher rate of corporation tax of 25% was introduced for passive income, income from a foreign trade and some development and mining activities. Manufacturing relief, effectively a 10% rate of corporation tax, was ended on 31 December 2002. For companies that were claiming this relief before 23 July 1998, it would still be available until 31 January 2010. The 10% rate for IFSC activities ended on 31 December 2005 and after this date, these companies moved to the 12.5% rate provided their trade qualified as an Irish trading activity.

The additional passing of the important Irish Taxes Consolidation Act, 1997 (“TCA”) by Charlie McCreevy[204] laid the foundation for the new vehicles and structures that would become used by IFSC law and accounting firms to help global multinationals use Ireland as a platform to avoid non-US taxes (and even the 12.5% Irish corporate tax rate). These vehicles would become famous as the Double Irish, Single Malt and the Capital Allowances for Intangible Assets tax arrangements. The Act also created the Irish Section 110 SPV, which would make the IFSC the largest securitisation location in the EU.[205]

Post crisis zero-tax economy (2009-)[edit]

The Irish financial crises created unprecedented forces in the Economy. Irish banks, the largest domestic corporate taxpayers, faced insolvency, while Irish public and private debt-to-GDP metrics approached the highest levels in the OECD. The Irish Government needed foreign capital to re-balance their overleveraged economy. Directly, and indirectly, they amended many Irish corporate tax structures from 2009-2015 to effectively make them "zero-tax" structures for foreign multinationals and foreign investors. The US Bureau of Economic Analysis ("BEA") "effective" Irish CT rate, fell to 2.5%.[46][43][55][56].

They materially expanded the "Capital Allowances for Intangible Assets" scheme in the 2009 Finance Act. This would encourage US multinationals to locate "intellectual property" assets in Ireland (as opposed to the Caribbean, as per the "double Irish" scheme), which would albeit artificially, raise Irish economic statistics to improve Ireland's "headline" Debt-to-GDP metric. They also indirectly, allowed US distressed debt funds to use the Irish Section 110 SPV to enable them to avoid Irish taxes on the circa €100bn of domestic Irish assets they bought from NAMA (and other financial institutions) from 2012-2016.

While these schemes were successful in capital, they had downsides. US multinational tax schemes lead to large distortions in Irish GNI/GNP/GDP statistics.[206] When Apple "onshored" their ASI subsidiary in January 2015, it caused Irish GDP to rise 26.3% in one quarter ("leprechaun economics"). Foreign multinationals were now 80% of corporate taxes, and concentrated in a smaller group.[1] In response, the Government introduced "modified GNI" (or GNI*) in 2017 (circa 30% below Irish GDP)[110], and a paired back of some multinational schemes to improve corporation tax sustainability.[39][40]

Ireland's aggressive tax strategy led it to become labelled as one of the top 5 global Conduit OFCs, and has come under attack from the US[22][23] and the EU (Apple's largest tax fine in history)[207]. Under pressure from the EU,[85][30] Ireland closed down the double Irish in 2015, which was described as the largest tax avoidance scheme in history. However, Ireland replaced it with the new "single malt"[86][87], and an expanded "capital allowances" scheme. More serious targeted responses have come in the form of the US 2017 TCJA (esp. FDII and GILTI rates), and the EU's 2018 impending "digital tax".

See also[edit]

References[edit]

  1. ^ a b c d e f g h i j k l m n o p "An Analysis of 2015 Corporation Tax Returns and 2016 Payments" (PDF). Revenue Commissioners. April 2017. 
  2. ^ a b c "20 multinationals paid half of all Corporation tax paid in 2016". RTE News. 21 June 2017. 
  3. ^ a b c d e f g h i j k l m n "Corporate Taxation in Ireland 2016" (PDF). Industrial Development Authority (IDA). 2018. 
  4. ^ a b c d "Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network". Nature Magazine. 24 July 2017. 
  5. ^ a b c "Ireland awarded high OECD rating on tax transparency". Irish Times. 22 August 2017. 
  6. ^ a b c "The Corporate Tax Avoidance Toolbox". B&R Beurs. 2018. 
  7. ^ a b c d e f g "How Tax Reform solved UK inversions". Tax Foundation. 14 October 2014. 
  8. ^ a b c d e f g h i j "Ireland's Top 1000 Companies". Irish Times. 2018. 
  9. ^ a b c "A Territorial Tax System Would Create Jobs and Raise Wages for U.S. Workers". The Heritage Foundation. 12 September 2013. 
  10. ^ a b c d e f g "IDA Ireland Competitiveness". IDA Ireland. March 2018. 
  11. ^ a b "Most of Ireland's biggest companies aren't Irish at all". thejournal.ie. 22 May 2015. 
  12. ^ a b "International GNI to GDP Comparisons". Seamus Coffey, University College Cork. 29 April 2013. 
  13. ^ a b c d e "Europe points finger at Ireland over tax avoidance". Irish Times. 7 March 2018. 
  14. ^ a b "National Income and Expenditure Annual Results 2015". Central Statistics. 12 July 2016. 
  15. ^ "Report of the Economic Statistics Review Group". Central Statistics Office. 4 February 2017. 
  16. ^ "Leprechaun-proofing economic data". RTE News. 4 February 2017. 
  17. ^ a b c "CSO paints a very different picture of Irish economy with new measure". Irish Times. 15 July 2017. 
  18. ^ a b c "New economic Leprechaun on loose as rate of growth plunges". Irish Independent. 15 July 2017. 
  19. ^ a b "Several of Ireland's top companies pay as little as 1% in tax". Irish Times. 29 September 2017. 
  20. ^ a b "'That's a joke', 'stealing': Ireland's low corporate tax rate criticised at Davos". thejournal.ie. 16 January 2018. 
  21. ^ a b "Luxembourg PM blasts Ireland's low corporate tax Rate". The Irish Examiner. 6 March 2018. 
  22. ^ a b c "Joseph Stiglitz: 'Cheating' Ireland, muddled Europe". The Irish Examiner. 2 September 2016. 
  23. ^ a b c d "The United States' new view of Ireland: 'tax haven'". Irish Times. January 2017. 
  24. ^ a b "The Missing Profits of Nations" (PDF). Gabrial Zucman (University of Berkley). April 2018. 
  25. ^ "EU countries are not 'tax havens', parliament says". EU Observer. 14 December 2017. 
  26. ^ a b "Ireland does not engage in "harmful tax competition" says European Commission". Irish Times. 6 December 2016. 
  27. ^ "OECD tax chief: 'Ireland is not a tax haven'". thejournal.ie. 23 July 2013. 
  28. ^ a b "'We have no problem with Irish tax system' - OECD". Irish Times. 5 February 2018. 
  29. ^ a b c "Brussels in crackdown on 'double Irish' tax loophole". Financial Times. October 2014. 
  30. ^ a b c d e "Ireland's move to close the 'double Irish' tax loophole unlikely to bother Apple, Google". The Guardian. October 2014. 
  31. ^ a b c d e "'Impossible' structures: tax outcomes overlooked by the 2015 tax Spillover analysis" (PDF). Christian Aid. November 2017. 
  32. ^ a b "Noonan claims Apple ruling an "attack" on Ireland's corporate tax regime". thejournal.ie. 2 September 2016. 
  33. ^ a b "Revenue refuses to comment on EC accusations over tax". Irish Independent. 21 December 2016. 
  34. ^ "Cabinet agrees to appeal €13bn Apple ruling". Irish Indepenent. 2 September 2016. 
  35. ^ "Breaking Down the New U.S. Corporate Tax Law". Harvard Business Review. 26 December 2017. 
  36. ^ a b "US corporations could be saying goodbye to Ireland". Irish Times. 17 January 2018. 
  37. ^ a b c "European Commission - Digital Tax Fact Sheet". EU Commission. 21 March 2018. 
  38. ^ a b "Shake-up of EU tax rules a 'more serious threat' to Ireland than Brexit". Irish Independent. 14 September 2017. 
  39. ^ a b c d "Minister Donohoe publishes Review of Ireland's Corporation Tax Code". Department of Finance. 21 December 2017. 
  40. ^ a b c d "REVIEW OF IRELAND'S CORPORATION TAX CODE, PRESENTED TO THE MINISTER FOR FINANCE AND PUBLIC EXPENDITURE AND REFORM BY MR. SEAMUS COFFEY" (PDF). Department of Finance. 30 January 2017. 
  41. ^ a b "Milestones of the IFSC". Finance Dublin. 2003. 
  42. ^ a b "Dermot Desmond on the IFSC past and future". Finance Dublin. 2003. 
  43. ^ a b c d "Report on Ireland's Relationship with Global Corporate Taxation Architecture" (PDF). Department of Finance. 2014. 
  44. ^ a b "History of the Irish Corporate Tax System" (PDF). Ernst and Young. 2014. 
  45. ^ a b "IRELAND Trade and Statistical Note 2017" (PDF). OECD. 2017. 
  46. ^ a b c d e f g h i j "Auditor General Report on Corporate Tax Chapter 20" (PDF). Auditor General. April 2017. 
  47. ^ "FactCheck: How much do multinationals actually contribute in taxes?". thejournal.ie. 9 September 2016. 
  48. ^ a b c d "CRISIS RECOVERY IN A COUNTRY WITH A HIGH PRESENCE OF FOREIGN OWNED COMPANIES" (PDF). IMK Institute, Berlin. January 2017. 
  49. ^ a b c "Winning FDI 2015-2019 Strategy". IDA Ireland. March 2015. 
  50. ^ a b c d e "What Apple did next". Seamus Coffey, University College Cork. 24 January 2014. 
  51. ^ "Quarter of Irish economic growth due to Apple's iPhone, says IMF". RTE News. 17 April 2018. 
  52. ^ "iPhone exports accounted for quarter of Irish economic growth in 2017 - IMF". Irish Times. 17 April 2018. 
  53. ^ a b "Ireland's deglobalised data to calculate a smaller economy". Financial Times. 17 July 2017. 
  54. ^ a b c d "Globalisation at work in statistics — Questions arising from the 'Irish case'" (PDF). EuroStat. December 2017. 
  55. ^ a b c d e "Pinning Down Apple's Alleged 0.005% Tax Rate Is Nearly Impossible". Bloomberg News. 1 September 2016. 
  56. ^ a b c d "Google pays €47m in tax in Ireland on €22bn sales revenue". The Guardian. 4 November 2016. 
  57. ^ a b "Intangible Assets Scheme under Section 291A Taxes Consolidation Act 1997" (PDF). Irish Revenue. 2010. 
  58. ^ a b "Capital Allowances for Intangible Assets under section 291A of the Taxes Consolidation Act 1997 (Part 9 / Chapter2)" (PDF). Irish Revenue. February 2018. 
  59. ^ "Google UK employees paid double their Irish equivalent". Irish Times. February 2016. 
  60. ^ "Revealed Eight facts you may not know about the Apple Irish plant". Irish Independent. 15 December 2017. 
  61. ^ "Does Google Ireland have 6,000 employees in Ireland?". FinFacts. 2015. 
  62. ^ a b "Corporate Tax regime in Ireland". Industrial Development Authority (IDA). 2018. 
  63. ^ a b c d e "Holding Companies in Ireland" (PDF). Dillon Eustace Law Partners (Dublin). 2016. 
  64. ^ "Irish Corporation Tax Portal". Revenue Commissioners of Ireland. 2018. 
  65. ^ "Archived copy". Archived from the original on 20 January 2010. Retrieved 6 January 2010. 
  66. ^ "Lowest and Highest Global Tax Rates". Tax Foundation. September 2017. 
  67. ^ "Worldwide Taxation is Very Rare". Tax Foundation. February 2015. 
  68. ^ "Double Irish Taxation Treaties". Revenue Commissioners. March 2018. 
  69. ^ "Most of Ireland's huge corporate tax haul last year came from foreign firms". sunday Business Post FORA. 14 May 2016. 
  70. ^ "Corporation Tax – A Note on the Context and Concentration of Payments" (PDF). Revenue Commissioners. October 2014. 
  71. ^ "Irish Corporate Tax Forecasting Analytical Note 10" (PDF). Irish Fiscal Advisory Council. September 2016. 
  72. ^ a b c d e "Change in tax treatment of intellectual property and subsequent and reversal hard to fathom". Irish Times. 8 November 2017. 
  73. ^ a b "Strong corporate tax receipts 'sustainable' until 2020". Irish Times. 12 September 2017. 
  74. ^ a b "Tax Reform in the UK Reversed the Tide of Corporate Tax Inversions" (PDF). Tax Foundation. 14 October 2014. 
  75. ^ a b c "The United Kingdom's Experience with Inversions". Tax Foundation. 5 April 2016. 
  76. ^ "What is the Double Irish". Financial Times. 9 October 2014. 
  77. ^ "The real story behind US companies' offshore cash reserves". McKinsey & Company. June 2017. 
  78. ^ "US corporate giants hoarding more than a trillion dollars". The Guardian. 20 May 2016. 
  79. ^ "Apple vs the EU is the biggest tax battle in history". Time Magazine. 30 August 2016. 
  80. ^ "Man Making Ireland Tax Avoidance Hub Proves Local Hero". Bloomberg News. 28 October 2013. 
  81. ^ "Scion of a prominent political dynasty who gave his vote to accountancy". Irish Times. 8 May 2015. 
  82. ^ "Controversial tax strategies brainchild of O'Rourke's son". Irish Independent. 3 November 2013. 
  83. ^ "Feargal O'Rourke Turning Ireland Into 'A Global Tax-Avoidance Hub'". Broadsheet Ireland. 29 October 2013. 
  84. ^ "After a Tax Crackdown, Apple Found a New Shelter for Its Profits". New York Times. 6 November 2017. 
  85. ^ a b "Brussels in crackdown on 'double Irish' tax loophole". Financial Times. October 2014. 
  86. ^ a b "Multinationals replacing 'Double Irish' with new tax avoidance scheme". RTE News. 14 November 2017. 
  87. ^ a b "How often is the 'Single Malt' tax loophole used? The government is finding out". thejournal.ie. 15 November 2017. 
  88. ^ "Multilateral Instrument: Department of Finance announces Irish positions". Deloitte. June 2017. 
  89. ^ a b "Intangible Assets Scheme under Section 291A Taxes Consolidation Act 1997" (PDF). Irish Revenue. 2010. 
  90. ^ a b "Capital Allowances for Intangible Assets under section 291A of the Taxes Consolidation Act 1997 (Part 9 / Chapter2)" (PDF). Irish Revenue. February 2018. 
  91. ^ "Capital Allowances for Intangible Assets "Specified Assets"". Irish Revenue. September 2017. 
  92. ^ "Ireland as a Location for Your Intellectual Property Trading Company" (PDF). Arthur Cox Law. April 2015. 
  93. ^ "Who owes more money - the Irish or the Greeks?". Irish Times. 4 June 2015. 
  94. ^ "Why do the Irish still owe more than the Greeks?". Irish Times. 7 March 2017. 
  95. ^ "Ireland's colossal level of indebtedness leaves any new government with precious little room for manoeuvre". Irish Independent. 16 April 2016. 
  96. ^ "Irish household debt falls but still among highest in Europe". Irish Times. 11 September 2017. 
  97. ^ "'Leprechaun economics' - Ireland's 26pc growth spurt laughed off as 'farcical'". Irish Independent. 13 July 2016. 
  98. ^ "Concern as Irish growth rate dubbed 'leprechaun economics'". Irish Times. 13 July 2016. 
  99. ^ "Blog: The real story behind Ireland's 'Leprechaun' economics fiasco". RTE News. 25 July 2017. 
  100. ^ "Irish tell a tale of 26.3% growth spurt". Financial Times. 12 July 2016. 
  101. ^ ""Leprechaun economics" - experts aren't impressed with Ireland's GDP figures". thejournal.ie. 13 July 2016. 
  102. ^ "Irish tell a tale of 26.3% growth spurt". Financial Times. 12 July 2016. 
  103. ^ "'Leprechaun economics' leaves Irish growth story in limbo". Reuters News. 13 July 2016. 
  104. ^ "'Leprechaun Economics' Earn Ireland Ridicule, $443 Million Bill". Bloomberg News. 13 July 2016. 
  105. ^ "Leprechaun Economics". Paul Krugman (Twitter). 12 July 2016. 
  106. ^ "Now 'Leprechaun Economics' puts Budget spending at risk". Irish Independent. 21 July 2016. 
  107. ^ "Leprechaun economics pushes Ireland's EU bill up to €2bn". Irish Independent. 30 September 2017. 
  108. ^ "Meaningless economic statistics will cause problems for stewardship of country". RTE News. 13 July 2016. 
  109. ^ "Report of the Economic Statistics Review Group". Central Statistics Office. 4 February 2017. 
  110. ^ a b "Leprechaun-proofing economic data". RTE News. 4 February 2017. 
  111. ^ "Here's How American CEOs Flee Taxes While Staying in U.S." Bloomberg. 5 May 2014. 
  112. ^ "Structuring Tax Inversions to Ireland" (PDF). Arthur Cox. 2014. 
  113. ^ a b c d e David Jolly, Ireland, Home to U.S. ‘Inversions,’ Sees Huge Growth in G.D.P., New York Times (12 December 2016).
  114. ^ a b c "Tracking Tax Runaways". Bloomberg News. 1 March 2017. 
  115. ^ "Bloomberg Special TAX INVERSION". Bloomberg. 2 May 2017. 
  116. ^ "Bloomberg Best and Worst Biggest Companies in Ireland". 2 May 2017. 
  117. ^ "Drugs company moves to cut tax bill". The Guardian. 15 April 2008. 
  118. ^ "Effect of Redomiciled PLCs". Central Statistics Office (Ireland). July 2017. 
  119. ^ "Overseas Cash and the Tax Games Multinationals Play". New York Times. 3 October 2012. 
  120. ^ a b "The world's largest drug company will soon be based in Ireland". thejournal.ie. 23 November 2015. 
  121. ^ a b "Pfizer pulls out of €140bn Irish Allergan merger". Irish Independent. 6 April 2016. 
  122. ^ a b "Trump to keep Obama rule curbing corporate tax inversion deals". Reuters. 4 October 2017. 
  123. ^ "KPMG Report on TCJA" (PDF). KPMG. February 2018. 
  124. ^ "How to stop the inversion perversion". The Economist. 26 July 2014. 
  125. ^ "Vantiv decides against Inversion". Bloomberg News. 10 August 2017. 
  126. ^ "Inversions under the new TCJA tax law". Tax Foundation. 18 March 2018. 
  127. ^ "Structured Finance (Section 110)". PWC Ireland. 2016. 
  128. ^ "Ireland is top Eurozone jurisdiction for SPVs". Irish Independent. 19 August 2017. 
  129. ^ "Ireland has world's fourth largest shadow banking sector, hosting €2.02 trillion of assets". Irish Independent. 18 March 2018. 
  130. ^ "Ireland: The Leading European Jurisdiction for SPVs, Structured Finance and Securitised Structures" (PDF). Irish Debt Securities Association. 2016. 
  131. ^ "How do vulture funds exploit tax loopholes?". Irish Times. 17 October 2016. 
  132. ^ "Speedy probe into vulture funds' tax urged". Sunday Business Post. 25 July 2016. 
  133. ^ "Tax avoidance could run to billions". Irish Independent. 24 July 2016. 
  134. ^ "Project Eagle's potential loss bigger than £190m". Irish Independent. 25 September 2016. 
  135. ^ "'Vultures' minimise their tax bills - as State now appears to have delivered the sale of the century". Irish Independent. 21 August 2016. 
  136. ^ "Vulture funds rub salt into the carcass of this country". David McWilliams Sunday Business Post. 1 August 2016. 
  137. ^ "State-backed funds using Section 110 to slash tax bill". Irish Times. 2 July 2017. 
  138. ^ "Cardinal Capital warns of 'damage' by new S110 Rules=Irish Times". 11 September 2016. 
  139. ^ "IMF queries lawyers and bankers on hundreds of IFSC boards". The Irish Times. 30 September 2016. 
  140. ^ "Former Regulator says Irish politicians mindless of IFSC risks". The Irish Times. 5 March 2018. 
  141. ^ "'Section 110' Companies: A Success story for Ireland" (PDF). Professor Jim Stewart Cillian Doyle. 12 January 2017. 
  142. ^ "Ireland, Global Finance and the Russian Connection" (PDF). Professor Jim Stewart Cillian Doyle. 27 February 2018. 
  143. ^ "Russian bank collapse shines light into shadowy corners of Irish finance". Irish Independent. 25 February 2016. 
  144. ^ "How Russian Firms Funnelled €100bn through Dublin". The Sunday Business Post. 4 March 2018. 
  145. ^ "More than €100bn in Russian Money funneled through Dublin". The Irish Times. 4 March 2018. 
  146. ^ "A third of Ireland's shadow banking subject to little or no oversight". The Irish Times. 10 May 2017. 
  147. ^ "Do you know what the Knowledge Box is?". Irish Indepdendant. 9 October 2015. 
  148. ^ "Revenue Guidance Notes for Knowledge Development Box" (PDF). Revenue Commissioners. 2016. 
  149. ^ "Guidelines Knowledge Development Box". BDO Ireland. 2016. 
  150. ^ "Action 5 Agreement on Modified Nexus Approach for IP Regimes" (PDF). OECD. 2015. 
  151. ^ "Knowledge Development Box Improvements Needed". Deloitte Ireland. 2016. 
  152. ^ "Knowledge Development Box: Best in Class?". KPMG Ireland. 16 April 2016. 
  153. ^ "Guidance on Tax Residence Irish Revenue" (PDF). Revenue Commissioners. 2017. 
  154. ^ a b "Knowledge Development Box Public Consultation and Observations" (PDF). Matheson. April 2015. 
  155. ^ "Ireland named world's 6th worst corporate tax haven". journal.ie. 12 December 2016. 
  156. ^ "MANTRAS AND MYTHS: A true picture of the corporate tax system in Ireland" (PDF). RTE News. February 2017. 
  157. ^ "Oxfam says Ireland is a tax haven judged by EU criteria". Irish Times. 28 November 2017. 
  158. ^ "Blacklisted by Brazil, Dublin funds find new ways to invest". Reuters. 20 March 2017. 
  159. ^ "Oregon Department of Revenue made a recommendation that Ireland be included as a 'listed jurisdiction' or tax haven". Irish Independent. 26 March 2017. 
  160. ^ "Ireland is not a tax haven, Leo Varadkar says". Irish Times. 23 November 2017. 
  161. ^ "There is a definition of a tax haven - and Ireland doesn't make that grade". Irish Independent. 2 October 2017. 
  162. ^ "OECD tax chief: 'Ireland is not a tax haven'". thejournal.ie. 23 July 2013. 
  163. ^ "EU countries are not 'tax havens', parliament says". EU Observer. 14 December 2017. 
  164. ^ "Law firm specialising in tax havens to create 75 jobs in Dublin". thejournal.ie. 12 June 2012. 
  165. ^ "Cayman Islands Law firm Walkers doubles up on Dublin office space in the IFSC". The Sunday Business Post. 4 February 2018. 
  166. ^ "After a Tax Crackdown, Apple Found a New Shelter for Its Profits". New York Times. 6 November 2017. 
  167. ^ "Law firm Matheson lobbied OECD to dilute proposed tax rules". Irish Times. 7 April 2016. 
  168. ^ "Consultation Paper on Review of Ireland's Corporation Tax Code" (PDF). Deloitte. January 2018. 
  169. ^ "The desperate inequality behind global tax dodging". The Guardian. 8 November 2017. 
  170. ^ "EU Commission Decision on State Aid by Ireland to Apple" (PDF). Apple (Ireland). 30 August 2016. Retrieved 14 November 2016. 
  171. ^ Foroohar, Rana (30 August 2016). "Apple vs. the E.U. Is the Biggest Tax Battle in History". TIME.com. Retrieved 14 November 2016. 
  172. ^ "Apple Sales International–By the numbers". Seamus Coffey, University College Cork. 21 March 2016. 
  173. ^ Taylor, Cliff (2 September 2016). "Apple's Irish company structure key to EU tax finding". The Irish Times. Retrieved 14 November 2016. 
  174. ^ "Why €13bn Apple tax payment may not be the end of the story". The Sunday Business Post. 28 January 2018. 
  175. ^ "EU asks for more details of Apple's tax affairs". The Times. 8 November 2017. 
  176. ^ "Ireland's digital tax battle - OECD to the rescue". RTE News. 18 March 2018. 
  177. ^ "Trump's US tax reform a significant challenge for Ireland". Irish Times. 30 November 2017. 
  178. ^ "Donald Trump singles out Ireland in tax speech". Irish Times. 29 November 2017. 
  179. ^ "Breaking Down the New U.S. Corporate Tax Law". Harvard Business Review. 26 December 2017. 
  180. ^ a b "EU Commission releases package on Fair and Effective Taxation of the Digital Economy". KPMG. 21 March 2018. 
  181. ^ "Why Ireland faces a fight on the corporate tax front". Irish Times. 14 March 2018. 
  182. ^ "EU Digital tax proposal appears to be targeted against the US". PwC. 22 March 2018. 
  183. ^ a b "MEPs approve new EU corporate tax plan which embraces "digital presence"". European Parliment. 15 March 2018. 
  184. ^ "EU digital levy could hit tech FDI and tax revenue here". Irish Independent. 21 March 2018. 
  185. ^ "What the EU's new taxes on the tech giants mean - and how they would hurt Ireland". thejournal.ie. 24 March 2018. 
  186. ^ "Taxation in Ireland 2016" (PDF). Irish Industrial Development Authority. 2016. 
  187. ^ "A GILTI Trap Waiting to Spring". Alvarez & Marshal. March 2018. 
  188. ^ "Irish High Court sends Facebook's EU-US data transfers before CJEU" (PDF). Max Schreme. 12 April 2018. 
  189. ^ "Facebook to put 1.5bn users out of reach of new EU GDPR privacy law". Irish Times. 19 April 2018. 
  190. ^ a b "Finance Accounts 2002" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  191. ^ "Finance Accounts 2003" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  192. ^ "wsC3.tmp" (PDF). Finance.gov.ie. Archived from the original (PDF) on 19 May 2016. Retrieved 18 September 2016. 
  193. ^ "Finance Accounts 2005 - Final 25 Sept.XLS" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  194. ^ "Fin Accounts 2006 English" (PDF). Finance.gov.ie. Archived from the original (PDF) on 19 May 2016. Retrieved 18 September 2016. 
  195. ^ "Fin Accounts 2007 English" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  196. ^ "Fin Accounts 2008 English" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  197. ^ "Fin Accounts 2009 English" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  198. ^ "Fin Accounts 2010 English" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  199. ^ "Fin Accounts 2011 English" (PDF). Finance.gov.ie. Archived from the original (PDF) on 29 April 2016. Retrieved 18 September 2016. 
  200. ^ "Fin Accounts 2012 English" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  201. ^ "Fin Accounts 2013 English" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  202. ^ "Fin Accounts 2014 English" (PDF). Finance.gov.ie. Archived from the original (PDF) on 4 March 2016. Retrieved 18 September 2016. 
  203. ^ a b c "The historical development and international context of the Irish corporate tax system (Ernst & Young)" (PDF). Department of Finance. 2015. 
  204. ^ "Taxes and Consolidation Act 1997". Irish Government. 1997. 
  205. ^ "Ireland is top Eurozone jurisdiction for SPVs". Irish Independent. 19 August 2017. 
  206. ^ "Europe points finger at Ireland over tax avoidance". Irish Times. 7 March 2018. 
  207. ^ "European Commission - PRESS RELEASES - Press release - State aid: Ireland gave illegal tax benefits to Apple worth up to €13 billion". europa.eu. 30 August 2016. Retrieved 14 November 2016. 

Sources[edit]