[NewsPoster]

The Irish government is preparing to close a tax loophole that many technology companies are using to their advantage. The government has announced changes to tax law covering Ireland, which will prevent Google, Apple, and other large enterprises from taking advantage of current tax rules in what is commonly known as a "Double Irish" tax arrangement.

"Aggressive tax planning by multinational companies has been criticized by governments across the globe and has damaged the reputation of many countries," said Irish Finance Minister Michael Noonan according to Reuters. "Schemes that exploit mismatches in tax legislation are being heavily scrutinized by the OECD (Organization for Economic Co-operation and Development) and others, and through the Base Erosion and Profit Shifting project they will come to an end over time."

While the announcement covers a wide array of tax schemes, Noonan added extra measures to affect the "Double Irish" arrangement, namely by requiring all companies registered in Ireland to also be "tax resident," meaning they are subject to local taxes. The change will apply to new companies from January 1, though existing companies will have a transition period until the end of 2020.

Irish Finance Minister Michael Noonan

The impact on technology companies could be considerable. In late 2013, it was found that Apple was able to avoid Ireland's 12.5 percent standard corporate tax rate, and pay less than two percent in taxes in the US by using the "Double Irish" scheme. Between 2009 and 2011, Apple used its Cork-based Apple Operations International "stateless" organization to channel billions of dollars in European sales to minimize the amount of taxes it owed.

Late last month, the European Commission issued preliminary findings into its tax-avoidance investigation, declaring that Ireland's tax provisions effectively provided "illegal state aid" to Apple. The company has previously claimed it "pays every euro of every tax that we owe," and "we have received no selective treatment from Irish officials. Apple is subject to the same tax laws as scores of other international companies doing business in Ireland," both of which appear to be accurate statements. The US investigation into Apple's taxation practices last year cleared the company of wrongdoing.

[Inkling]

Give that corporate tax experts have been using about this giant loophole for years, this belated response is more that a little suspicious. Perhaps bad publicity has finally managed to trump political contributions (from Apple and others) in the minds of Ireland's politicians.

[Flying Meat]

This could be interesting...

[jimoase]

How long will it take for the Double Irish to turn into the French Exodus?

[myramoki]

Abuse - Verb - 1. use (something) to bad effect or for a bad purpose; misuse. 2. treat (a person or an animal) with cruelty or violence, especially regularly or repeatedly. How exactly does a company abuse tax rules when they are obeying them? They might be using doing some trickery to combine different rules in a way that was no intended, but that certainly doesn't mean they are abusing them. While we may feel that they may be behaving immorally, they are absolutely behaving ethically based on the rules as they have been laid out.

That said, I fully expect all those billions to move to a different country with the next best deal. And will continue moving from country to country, chasing the next best deal. The only thing I find unfair, is I don't have millions or billions and a team of accountants to do the same for me.

[Charles Martin]

To be clear, Apple's statements on this matter have been -- and continue to be -- entirely truthful and accurate. The Irish government created this loophole, and businesses took advantage of it entirely legally. Apple has paid what it has been billed, and has not received any special treatment compared to any other company.

Apple has been in Ireland since (IIRC) the mid-80s, so it is unlikely to leave there. The EU is sending a signal to other countries that these sorts of loopholes need to be closed, so it's unlikely that anyplace else in Europe is going to offer such loopholes for very long.

[jscotta]

@chas_m you are correct that Apple has and will most likely continue to be in Ireland for sometime to come. However, the changing taxes may change the environment pools presence need not remain at the current size.so while Apple may remain, the number of employees based in Ireland may diminish. I cannot speak with authority there since I do not know the tax laws and how it is going to impact Apple. However, what you did could prove interesting for those who like to watch that type of corporate maneuvering.