Still time for Google et al to hide profits overseas

[nitpicker]

http://www.forbes.com/sites/robertwood/2014/10/14/ireland-corks-double-irish-tax-deal-closing-time-for-apple-google-twitter-facebook/

10/14/2014 @ 2:37AM

Ireland Corks Double Irish Tax Deal, Closing Time For Apple, Google, Twitter, Facebook

Ireland has bowed to EU and U.S. pressure to cork ‘double Irish’ tax deals. Ireland is the go-to place for Apple, Google, Twitter, and Facebook, not to mention big pharma. At 12.5%, Ireland’s corporate tax rate trounces the U.S. rate of 35%. But these companies don’t pay that 12.5% under the double Irish structure that is a high-tech standard.

A double Irish funnels royalty payments for intellectual property from one Irish-registered subsidiary to another. The latter is usually in a country with no corporate income taxes. But Brussels has pushed hard for closing time, though generous grandfather rules will keep these companies imbibing for years. In that sense, while Ireland may have to change some of its tax code and even cork the Double Irish, there’s still time.

The money is astounding. Facebook flipped more than $700 million to the Cayman Islands in a Double Irish. Google used the Double Irish and the Dutch Sandwich, saving billions. Google and Microsoft cut their overseas tax rates to single digits with Dublin-registered subsidiaries designated as tax resident in Bermuda.

The IRS isn’t alone in its criticism. The EU and OECD (Organization for Economic Cooperation and Development) say Ireland gave sweetheart tax deals to Apple amounting to illegal state aid. But when is the last call? With grandfathering, there’s no immediate threat and there could even be a run on the structures. The double Irish will close as of January 2015, but companies in place can keep their structures until December 31, 2020.
(snip)