The Department of Finance in Ireland can make changes in the legislature, that will disable using so-called “Double Irish Deception” scheme to avoid paying taxes, informs Reuters citing The Sunday Business Post.
No details of amendments are revealed. The Irish Independent writes that the Department refused to comment on the information published by The Sunday Business Post, however, it was stated, that companies are always looking for creepholes in taxation systems of different countries to minimize taxes.
Independent informs about no changes planned for the nearest future.
Double Irish scheme includes two companies registered in Ireland, where the parent foreign company transfers intellectual property rights to the first Irish company, which in its turn sells these rights for a considerable price to the second Irish company.
The latter operates worldwide and receives revenues under the name of the foreign company, and then transfers main part of the received income as a fee for using the intellectual property to the first Irish company. Such payments are not liable to taxation. The first company does not also pay the corporate tax as its headquarters as a rule is registered offshore with no corporate tax (for example, in Bermuda), and according to the Irish law the organization can pay taxes in the country from where it is governed.
This way the parent foreign company decreases spendings on taxation to a great extent. At the same time, in case of attaining to Double Irish and if the funds are wired through the Holland offshore, taxes can be declined almost to zero. Such lowering can be achieved only if the country, where the parent company is located, considers as residents only the companies which are registered within its borders (for example, USA).
Stories about Ireland's intention to liquidate the scheme of tax evasion appeared amid the USA government criticizing Dublin, as in the second half of May the U.S. Senate accused Apple of not paying taxes for $74 billion revenue. Thus, the U.S. legislatives consider that the Irish authorities have helped the company. However, Dublin disproved such assumptions. Google, Yahoo! and other worldwide companies are also being accused of deploying Double Irish.