Irish Tax Advantage over Apple and Google

Many large companies to channel revenues through Ireland to get an advantageous tax rate, but there must be an end.

There is a clever and legitimate way, companies can send money through Ireland to get drive their tax rate down, but it may soon disappear. Ireland will close the mouse hole, which has given the big companies savings of billions.

The link below provides a brief illustration of how it can work.

It is not certain that the legislative changes in Ireland will be adopted, but sources tell that it ‘ is more likely than not that they will be adopted ‘. Ireland, together with other countries has also been under heavy pressure from the EUROPEAN UNION.

Should this law be adopted, there will be a period where the big companies like Apple and Google can reorganise itself. So they get little time to right into after the new Irish laws.

Risky for Ireland

Despite pressure from the EU, which probably will be happy for the change, so it is not without risk for the Irish itself. The large, multinational companies that have been using Ireland in their tax plans, stands for for about 160,000 work places in the country.

They represent about one in ten working space in the country, and it can therefore potentially stand to disappear. Ireland was a good place to channel income through, since they are in addition to the low tax of natural causes also speaks well English – an important characteristic in an international site.

On the other hand, Ireland looked could earn some more tax dollars, if they can convince the big firms to remain in the country in some capacity.

Apple-example

There has been much focus on Apple as an example of the companies that have organized themselves in Ireland, in order to get tax benefits, among other things because we have concrete numbers away. And it is no small change, which has been spared for Apple.

During a hearing last year in the United States told Apple’s boss, Tim Cook, Apple in 2011 and 2012 in all has saved 12.5 billion dollars on their event in Ireland. The runner up in the $ 17 million saved per day, It is barely 100 million Danish kroner per day.

Apple has created a subsidiary in Ireland, called Apple Operations International. When Apple has earned money, they paid them for the subsidiary in Ireland, which then paid another subsidiary, which in a country that has no or very low taxes.

The model is legal, and it reduces the tax rate substantially, but at least in Ireland may be over.