Ireland reforms its controversial lenient tax structure
Ireland’s government will make major reforms to the country’s corporation tax structure, including the abolition of the so-called ‘double Irish’ scheme which has allowed large US multinational companies such as Google and Apple to cut billions of dollars off their tax bills.
After much international pressure, Ireland's government will make major changes to the country's corporation tax structure, including the abolition of the controversial so-called 'double Irish' scheme which has allowed large US multinational companies such as Google and Apple to cut billions of dollars off their tax bills.
During a speech yesterday Irish Finance Minister Michael Noonan said this option would now no longer be available, as the Irish government was changing its residency rules to require all companies registered in Ireland to also be a tax resident.
This matches Irish law with US and UK rules, and will prevent the current option used by multinational companies to channel untaxed revenues to an Irish subsidiary, which then pays the money to another company registered in Ireland that is a tax resident elsewhere, usually a tax haven.
The change will take effect from the 1st of January 2015 for new companies, while for existing companies there will be a transition period until the end of 2020. Mr Noonan recognised the growing criticism of Ireland's tax planning, coupled with the OECD's scrutiny of schemes which exploit inconsistencies in tax legislation.
"The change will not bring an end to international tax planning; that requires similar action by all countries. By taking action now, we are giving certainty to investors about corporate tax in Ireland for the next decade", Mr Noonan said.
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