Ireland's days as a tax haven for American tax companies, such as Apple, Google and Facebook, may soon end if US senators get their way.
The chairman of the Senate Permanent Subcommittee on Investigations, Carl Levin (D-Mich.), and Sen. John McCain (R-Ariz.) are again attempting to curtail the the “Double Irish and Dutch Sandwich” tax-avoidance scheme (in which American-owned companies use Irish and Dutch subsidiaries to funnel profits into low- or no-tax jurisdictions), reports the NY Post.
A renewed effort is to be made by McCain and Levin after their first push went nowhere.
The proposed policy change would move Ireland a step closer to fully charging companies its official 12.5 percent corporate tax rate. Loopholes frequently lower the tax rate to around 3 percent.
“The US government is losing tens of billions of dollars at a time when we are revenue-constrained, worrying about the deficit, cutting spending — you know, we need all the money we can get,” said economist Bruce Bartlett, a former domestic policy adviser to Ronald Reagan.
“Ireland wouldn’t be doing this if it wasn’t being pressured politically to do so,” Bartlett told The Post.
Patrick Howlin, New York-based director for Ireland’s Industrial Development Authority, said: “Companies may well end up paying somewhat more taxes globally than they currently do — and I stress the word ‘may.' Everybody recognizes that change is coming in the international tax environment, and Ireland will obviously be part of that change.”
However, even if multinational companies end up paying more, tax experts say that it won't put an end to the Double Irish and the Dutch Sandwich.
The Double Irish utilizes loopholes in US and Irish tax laws to move profits of US multinationals from Ireland to jurisdictions with zero corporate-tax rates, such as Bermuda.
The so called Dutch sandwich shifts profits in Ireland through the Netherlands en route to Bermuda.
The Post reports that Audit Analytics notes that major US companies pumped up their offshore earnings by 15 percent last year to a record $1.9 trillion by posting profits outside the US and avoiding a huge tax bill.
Guess the only state in the US where an Irish last name ranks in the top 3