The End of Double Irish
Quote from Ndubuisi Ekekwe on January 24, 2020, 2:30 AMThis month marks the end of the so-called 'Double Irish'—a much-used tax avoidance strategy that involves setting up operations in Ireland to take advantage of its low corporate tax rates. Under pressure from the OECD, the EU, and the U.S., Ireland closed the loophole, while a similar one in the Netherlands—the 'Dutch sandwich'—has also shut. But with companies searching for new options to keep their taxes low, other countries or regions may just step in to fill the gap, notes Fortune newsletter.
Thanks to a change in Irish law, Google in the U.S. will do something it hasn't in years: own outright its intellectual property, including patents, trademarks, branding, and more.
For years, Google and other companies employed a legal tax avoidance strategy called the Double Irish, Dutch sandwich. Here's how it works: Using complex multi-national structures, they transferred ownership of intellectual property to wholly owned subsidiaries in low- or no-tax regions and then licensed the material back to the rest of the company. Profits turned into "license fees" and thus avoided taxes.
This month marks the end of the so-called 'Double Irish'—a much-used tax avoidance strategy that involves setting up operations in Ireland to take advantage of its low corporate tax rates. Under pressure from the OECD, the EU, and the U.S., Ireland closed the loophole, while a similar one in the Netherlands—the 'Dutch sandwich'—has also shut. But with companies searching for new options to keep their taxes low, other countries or regions may just step in to fill the gap, notes Fortune newsletter.
Thanks to a change in Irish law, Google in the U.S. will do something it hasn't in years: own outright its intellectual property, including patents, trademarks, branding, and more.
For years, Google and other companies employed a legal tax avoidance strategy called the Double Irish, Dutch sandwich. Here's how it works: Using complex multi-national structures, they transferred ownership of intellectual property to wholly owned subsidiaries in low- or no-tax regions and then licensed the material back to the rest of the company. Profits turned into "license fees" and thus avoided taxes.