Lawgier.net

The technical side of a french guy.

The "Double Irish" might be over

Re/Code :

“Ireland’s plan to close a “Double Irish” tax loophole could cost U.S. companies including Apple and Google billions of dollars, although a new break and pressure to tackle tax avoidance elsewhere means they are unlikely to decamp.”

Finally, the E.U is taking some actions against tax evasion taking place in Ireland, Luxembourg and Netherlands. It's time to end the economical disadvantaged induced by those taxes policies, whether it's the" Double Irish" or the "Dutch Sandwich", or anything else.

For those unfamiliar with this topic, those countries took their taxes policies as a mean to increase their economical competitiveness, as tax heavens countries like Bermudas do (but with higher tax rates, and with better transparency rules to not be classified as tax heavens). In a globalized world, this should not poses huge problems, individual States should be able to take some actions against tax evasions. This is what's happening in the U.S, where the government can take some actions to avoid those tax evasions for domestic profits (they have a bit less power concerning international profits). But being in the E.U, and more importantly, in the Schengen and/or the Euro zone changes everything, because there is almost absolutely no borders between it's members (which can be a wonderful thing, trust me), and you can operate freely in France or Germany with a company based in Ireland or Luxembourg (This is what Microsoft or Amazon do). This means that, when I buy something on Amazon.fr, the transaction is made between me and Amazon EU S.A.R.L. in Luxembourg, and not Amazon France. So, the French state doesn't see any of my money (except the VAT, 20%), even if I made the purchase in France. The only purpose of Amazon France is to operate its warehouses and pay its workers. Also, if a French ad firm want to buy some ad spots on Google, it make a deal with Google Ireland, and not Google France.

I could write something more about why (moderate) taxation is important, but you have just to understand that the trucks that Amazon uses to deliver its goods, and all the infrastructures, were paid with theses taxes. Everyone has to contribute to the effort, and forgetting this is something that I cannot understand.

Anyways, back to the point :

“The question is where do you go to? There’s nowhere else in the European Union. It’s just getting too hot,” said George Bull, head of the tax practice at advisory group Baker Tilly.

This proves that there was only a few countries that was making this tax evasion possible, and not that there was only a handful of countries with very high taxes. But this also proves that the EU is a mess when it comes to imposition[1]. And this have to change.

And, to conclude all of this :

The impact on companies’ profits will be reduced by a new scheme announced by Noonan under which profits linked to the exploitation of patents will attract lower tax rates. Britain already has such a scheme, under which profits linked even tangentially to a patent can face a tax rate of 10 percent.

If you were seeking a new loophole, the Irish government has your back!


  1. See this table on "Adjusted top statutory tax rate on corporate income, 1995–2014", Eurostat ↩︎