Ireland has recently announced some changes to its tax structure that would eliminate the “double Irish” tax deals that have attracted companies such as Apple and that were the subject of an earlier LBN report. Tax attorney Rob Wood discusses the changes and the effects they will have on companies that were attracted to Ireland’s corporate tax structure. The changes are also the subject of Wood’s Forbes article “Ireland Corks Double Irish Tax Deal, Closing Time For Apple, Google, Twitter, Facebook.”
Wood notes that there have been attacks from the U.S. and the EU on Ireland’s system of letting companies funnel money through Ireland and becoming a new tax haven. Companies have been able to use the Irish system and reduce their tax rates to well below the official Irish corporate tax rate of 12.5%.
Wood points out that there is no retroactive aspect to Ireland’s move. For new companies coming in, the cut-off date on taking advantage of the present system is January 1, 2015. As to existing structures, they will not work after December 31, 2020. It’s business as usual until that latter cut-off date. This will allow companies to phase out their tax structures to minimize the financial loss.
Wood explains that Ireland is adding a new “patent box” plan in Ireland to allow certain specific kinds of companies to be taxed at a lower rate by using the patent box to keep their intellectual property based in Ireland.
For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network. The Legal Broadcast Network is a featured network of the Sequence Media Group.