Senators Levin, McCain say Ireland faces questions even as Apple tax loophole tightened

“Senator John McCain said Ireland still faces questions on how corporations use the country to lower taxes after Finance Minister Michael Noonan moved to calm a controversy triggered by Apple Inc. (AAPL)’s practices,” Joe Brennan, Donal Griffin and Jesse Drucker. “Noonan laid out plans yesterday to scrap a measure in allowing companies registered in the country to be ‘stateless’ in terms of tax residency. This may enable companies to channel worldwide profits through their Irish-incorporated company and not have a tax liability anywhere, Noonan told reporters. He said ‘not very many’ firms other than Apple do this.”

“Noonan’s move ‘is encouraging,’ Arizona Republican McCain and Levin, the Michigan Democrat who leads the U.S. Senate investigations subcommittee, said in a statement late yesterday. ‘Important questions do remain, however, including whether the new rules will continue to allow Irish subsidiaries to dodge taxes by, for example, excluding substantial income” from Ireland’s 12.5 percent corporate tax rate, they said,'” Brennan, Griffin and Drucker report. “While the proposal targets companies like Apple using Irish subsidiaries that don’t declare a tax residence anywhere, many U.S. multinational companies rely on Irish subsidiaries that claim to be ‘tax resident’ in zero or low tax jurisdictions — which accomplishes the same savings.”

“Google last year cut $2.2 billion off its tax bill by paying royalties to an Irish unit that it said is headquartered in Bermuda. The announcement by Noonan would not affect that structure, known as a ‘Double Irish,'” Brennan, Griffin and Drucker report. “Yahoo! Inc. (YHOO) has paid royalties to an Irish subsidiary resident in Grand Cayman; LinkedIn Corp. (LNKD) has paid royalties to a subsidiary that is resident in the Isle of Man; anti-virus software maker Symantec Corp. (SYMC) uses one claiming residency on the island of Jersey; and EBay Inc. (EBAY) has managed its tax bill using an Irish subsidiary that declared its tax residence in Luxembourg, corporate filings show.”

Read more in the full article here.

MacDailyNews Take: How about leaving the Irish alone and minding your own business, including questioning why companies work so diligently to avoid U.S. corporate taxes, geniuses?

Here, we’ll help: The U.S. corporate tax rate is way too high. Obviously.

Under the current U.S. corporate tax system, it would be very expensive to repatriate that cash. Unfortunately, the tax code has not kept up with the digital age. The tax system handicaps American corporations in relation to our foreign competitors who don’t have such constraints on the free flow of capital… Apple has always believed in the simple, not the complex. You can see it in our products and the way we conduct ourselves. It is in this spirit that we recommend a dramatic simplification of the corporate tax code. This reform should be revenue neutral, eliminate all corporate tax expenditures, lower corporate income tax rates and implement a reasonable tax on foreign earnings that allows the free flow of capital back to the U.S. We make this recommendation with our eyes wide open, realizing this would likely increase Apple’s U.S. taxes. But we strongly believe such comprehensive reform would be fair to all taxpayers, would keep America globally competitive and would promote U.S. economic growth.Apple CEO Tim Cook, May 21, 2013

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  1. instead of sounding off on ireland, which is currently still open for business, why don’t they focus on their own backyard and get us open for business again. nothing like trying to address our problems here wh… LOOK! A SQUIRREL!

  2. Greedy, stupid and blind US congressmen just want 1) more votes for sounding tough… and 2) free money that does not belong to them/ USA. Taxes for items sold overseas are paid for overseas in the country that the items sell in. PERIOD. That capital is then moved to Ireland where it can be used and controlled easily.

    Its the USA that wants to double tax the money, once in the country of sale and once in the USA cause we are greedy.

    And Ireland understands this but does not want to upset the worlds ire.

    As usual, no progress out of congress, just noise designed to LOOK GOOD. Sad, just sad.

  3. A red mist comes over me whenever I hear Americans talk about my beloved Ireland in this way. We Irish have our own tax laws and do not need Americans to come over here to teach us how to tax corporations.

    I’ll slam my Irish fist so hard down on Levin’s and McCain’s face so hard they’ll be seeing stars into next week.

    1. If you punch him hard enough he will gladly make a video extolling the virtues of Irelands tax system, which Ireland can then use as propaganda to attract new corporations!!

      But seriously America, have we not had enough of this drunken blow-hard? He was a terrible service-man, largely getting by on the achievements of his dad and granddad. He was a mediocre pilot, generally unsat, insubordinate and drunk. His service record was unremarkable, and other POW’s have cast doubt on many of his claims. He is a philandering gold digger and a government whore to corporate interests. Who the hell cares what this clown has to say. To think people thought he should be president..

  4. Ireland can do whatever they want. If the US, or any other country doesn’t like it then that’s what diplomatic relations are for, it should be discussed to see if any agreements can be reached to be of mutual benefit. Ultimately, US law is for the US, not Ireland.

  5. Screw you Levin and McCain, and all you politicians.
    Why don’t you face “questions” about your continuing worthlessness?.
    Idiots, criminals, shysters & bums.

    Hey, great name for a law firm!.

  6. Let’s see, if a US company pays more tax to Ireland, they would then get more foreign tax credits and have to pay less tax to the US when that income is repatriated. Sounds smart.

  7. MDN is being very one-eyed about this. Ireland has gamed the system in order to attract investment, at the cost of nations across the world. The US corporate tax rate is high when compared to zero, but not otherwise. Corporate taxes have no effect on the profitability of a corporation, since they are paid out of shareholders’ funds AFTER profits have been declared. Taxes can affect the amount of money a corporation can retain for future investment, but in reality a higher tax rate just means lower dividends.

    In any argument about taxation you must take a holistic view. The US has a problem with balancing income and expenditure. The right want less expenditure on those areas they don’t support, and reduced tax on those areas they do support. Ditto for the left. If you cut corporate tax you have either increase other taxes or decrease expenditure. Given the huge and increasing wealth gap in the nation, decreasing expenditure on the disadvantaged and decreasing taxation on the wealthy is an unsustainable strategy which inevitably leads to social unrest and, in extreme cases, to revolt.

    Ireland is under pressure from all quarters to stop gaming the system and withdraw support from other tax havens. Their day in the sun is coming to an end, as it should.

    As for tax on repatriated earnings, why should this be tax-free in the first place? The US should move to repeal the tax holiday on overseas earnings altogether. If they then offer a reduced rate on untaxed earnings held overseas for twelve months all the money will come back to the US.

    1. “Gaming the system” ?? What system?

      Ireland is a sovereign nation, they are free to do as their citizens and government see fit. Who the hell are you or America for that matter to tell them how to operate their tax code? Talk about misguided arrogance…

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