“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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