Irish Finance Minister
Michael Noonan announced October 14 that Ireland will eliminate the ability of
new companies to use the "double Irish" tax arrangement, effective
January 1, 2015, by changing residency rules to require all companies registered
in Ireland to be Irish tax residents as well.
Noonan provided the
details of a roadmap setting forth the government's international tax strategy
in a financial statement for the 2015 budget that calls for attracting and
retaining foreign direct investment while staying in alignment with measures
being developed on a global scale to reduce base erosion and profit shifting.
The "double
Irish" tax arrangement allows companies to shift profits to low- or no-tax
jurisdictions by taking advantage of mismatches in corporate residency rules.
Ireland plans to change
its residency rules so that new companies registered in Ireland on or after
January 1, 2015, will be required to also be Irish tax residents. Existing
companies would have until the end of 2020 to come into compliance with the new
law.
However, Noonan
emphasized that no change will be made to the country's 12.5 percent corporate
tax, a rate that he said "never has been and never will be up for
discussion."
Multinationals that use
the double Irish arrangement recognize that they will need to make changes to
ensure that profits are allocated to jurisdictions where substantive operations
are located.
From a U.S.
multinational's perspective, Ireland is already an attractive location for
investment because of a shared language and similar laws on corporate governance
and employment.
No comments:
Post a Comment