Ireland moves to close one tax break, opens another

As the Irish government moves to close one door to corporate tax avoidance, it is opening another.

Tucked into legislation to eliminate a much criticized tax structure known as the “Double Irish” is a separate provision that would allow companies to pay no corporate tax on profits earned from patents, licenses and other intellectual property.

The legislation, which would expand a current tax break that allows companies to shield 80% of that income, also proposes to add customer lists to the types of intellectual property that can be covered.

The expanded tax provision proposed in the Irish budget would give companies an incentive to make Ireland the home for their intellectual property — some of it now tied up in Double Irish structures — as well as give them a simpler means to shield some of the same income from taxes.

“Rather than reducing tax deductibles, they have been increased in this budget,” Jim Stewart, associate professor of finance at Trinity College Dublin, said Tuesday.