Here’s What U.S. Businesses Order When They Have a Tax Headache
At a glance, a Double Irish sounds like the type of drink someone would order at 6 o’clock on a Friday night in an attempt to wash away the stress of the workweek (we imagine a double shot of Jameson or Connemara, if you’re into that). If, sitting at this hypothetical bar on a Friday night, someone also ordered a Dutch sandwich, you may expect to see them served some sort of vegetable sandwich (perhaps with Gouda, if you’re into that). Nothing worth writing home about here.
But to torture the metaphor (something that we are into), instead of a stiff drink and a delicious sandwich, this hypothetical patron at a hypothetical bar would be served with a stack of papers by a tax lawyer in a snazzy suit. As much as a Double Irish with a Dutch sandwich sounds like something you could order at any respectable pub, it’s actually just jargon for a tax arrangement that multinational corporations use to limit their tax liability.
The scheme was written about in the May 2007 issue of Practical US/International Tax Strategies. The authors of the article (Double Irish More than Doubles the Tax Savings) explain that “Ireland is attractive for low corporate tax rates because it has yet to implement (or enforce aggressively) some of the more familiar ‘anti-abuse’ mechanisms.”