No more seeing double: Irish tax laws about to change
It appears as if Irish eyes won’t be smiling on U.S. corporations soon.
The government of Ireland is set to change its tax code tomorrow to eliminate some of those loopholes that American companies have come to love. Among the targets– the so-called “double Irish” tax break.
Both the U.S. and European Union have taken Ireland to task for its low-tax policies.
“There really does seem to be pressure on Ireland and these other countries that really went to the extreme, to kind of go into business as a tax haven,” says Yahoo Finance columnist Michael Santoli.
American firms such as Facebook (FB) and Apple (AAPL) have avoided billions in taxes thanks to the generosity of the Irish laws. Ireland got slammed especially hard during the financial crisis of 2008 and has been using tax incentives as a way to attract foreign businesses into the country. The companies say they are just paying what the law says they owe. But now, those generous deals may be a thing of the past.
Still, Santoli doesn’t believe changes in the Irish tax code will suddenly mean corporations will be paying full price now.
“I think it’s just going to move the game somewhere else,” he says. This is not going to get rid of the idea that big companies, multi-national companies want to funnel their profits to tax-advantage venues.
He says tax avoidance is in the DNA of large firms.
“Someone is going to be calling the equivalent of the Tom Cruise character in ‘The Firm’ and say, ‘Make sure I don’t pay taxes,’” he adds.
And Santoli says all these tax gyrations by U.S. corporations really don’t impact America very much, anyway.
“Corporate tax revenue is just not an incredible number for the United States federal budget in the first place,” he says. “So I don’t think it’s something you necessarily feel, but maybe for political cosmetic reason it changes.”
