If Ireland had set up the system of “Double Irish,” allowing the companies to take advantage of unpublished fiscal advantages, it seems that the budget 2015 deletes certain measures of this device, making it much less attractive for companies. The end of a tax haven ?
What it is “Double Irish ? “
“Double Irish” allowed companies installed in Ireland to place their center of interest in a tax haven, then to create a front company there which gets back a big part of profits and, so to pay taxes only on a small part of their income. The fiscal residence of these companies was then considered as not being on the Irish ground. It is in this opportunity that they are engulfed big companies like Google, Facebook or Apple. Because their income, considered as not being taken up residence in Ireland, was subjected only to a 2 % tax. The giants as Google have saved more than 2,5 billion dollars.
However these stateless companies have raised many questions both in America and in Europe. Because countries where from they arise and where they have numerous interests did not receive or receive very few taxes from them. The cases of Apple and Google in particular stirring up controversy. Countries leaders of the G 20, the OECD, the European Union and the United States, quite particularly, by combining its way to other countries, putting pressure on Ireland, thus Ireland just announced a fiscal reform for 2015. This reform highlights the end of the “Double Irish” as it exists today.
The end of a paradise ?
Irish Prime Minister, in fact, announced measures to abolish this advantage of the hybrid companies. Now, the multinationals which wish to settle down in Ireland will have to declare their fiscal residence and be subjected, in full, to the tax on the Irish income. However, if the new law is organized, it is much more to calm the political tensions. Ireland has indeed regained an economic health, unemployment is at its lowest for more than five years and the growth forecast flirting with 4%. And if Dublin accepted the end of this fiscal attraction, it kepts on the other hand, the rate still very attractive 12,5 % of taxation on companies.
And this rate remains one of the lowest in Europe.
By going into the path of the struggle against the tax specifics considered disloyal, Ireland plays the game of Europe but guards in its sleeve the asset of its peculiarities. Ireland allows companies settles in the country to take advantage of a reduced tax rate.
And therefore encourages companies which previously took advantage of the “Double Irish” to remain in Ireland, which gives it a substantial income and a vital economic growth.
In any case, this fiscal reform Indeed, this reform will be effective for companies in 2015. Nevertheless those who take advantage of this system of “Double Irish” can again preserve it during 5 years until 2020.
They will have more time to find a new fiscal opportunity. This is still the best time for the big groups which wish to enjoy this ” fiscal sandwich ” before the end of the year, to be able to draw from it the advantage until 2020.