Ireland to Tech Companies: Your Tax Loopholes Are Safe
American tech companies that keep their tax burdens low by shifting profits into Ireland will be able to continue doing so in the foreseeable future. Michael Noonan, Ireland’s Minister for Finance, recently reassured large tech companies by noting that the country has no plans to make any major changes to its corporate tax laws. American tech companies such as Apple (NASDAQ:AAPL), Facebook (NASDAQ:FB), and Google (NASDAQ:GOOG) have long taken advantage of Ireland’s favorable tax rates.
“Ireland is one of the most open economies in the world and our taxation system is open, transparent,” Noonan recently told the U.K.’s Telegraph. “All the rules are clearly set down in our national laws and profits earned in Ireland are liable to tax at 12.5pc. On Budget day this year, I published Ireland’s international tax strategy in order to provide a clear and accurate picture of our corporate tax regime.”
Apple, Facebook, and Google have all faced questions at home about their tax avoidance strategies in Ireland. In June, Apple CEO Tim Cook made an appearance in front of the Senate Permanent Subcommittee on Investigations in order to answer questions about the California-based company’s offshore tax practices.
The Senate hearing revealed that Apple avoided income taxes on $74 billion in profit made between 2009 and 2012 by using multiple subsidiaries based in low-tax countries such as Ireland. However, Apple is not the only tech company to take advantage of the differences between the tax laws in Ireland and the tax laws in the U.S. Facebook and Google have also benefited from Ireland’s unique territorial tax system.