The goal is to shut down the use of socalled double irish and double irish dutch sandwich structures commonly used by u. Silicon valley fights to keep its dutch sandwich and. Us1 us operating company th tax haven company royalties reduces us taxable income us customers revenue ne dutch company profits can be transferred tax free under irish tax law ir1 irish company owns ip non us customers revenue ir2 irish company profits can be transferred tax free under irish tax treaty profits can be transferred tax free. The double irish with a dutch sandwich is a tax avoidance technique employed by certain large corporations.
Deloitte highlights on international taxation 2019 pdf. Dutch sandwich is a base erosion and profit shifting beps corporate tax tool, used mostly by. The prime focus is to analyze the double irish and dutch sandwich tax structures used by large multinational enterprises and any other inferences that can be made from these. The author does not represent or warrant the accuracy or reliability of the content. Double irish with a dutch sandwich tax evading system 1. Double irish dutch sandwich tax strategy viewsave archived versions on. The reputation of the netherlands concerning international corporate taxation. The double irish is a base erosion and profit shifting beps corporate tax tool, used mostly. The dutch sandwich is most commonly associated with the double irish beps tax. Pdf a model of aggressive tax optimization with the use of.
As appetizing as that may sound, it is actually a form of legallypermitted tax avoidance. You use two irish companies and in the middle you have a dutch company. Download this zew discussion paper from our ftp server. In order to minimise their global tax bills, mncs engage in a tax avoidance technique known as the double irish with a dutch sandwich technique. Double irish dutch sandwich tax savings how it works. Beneficiaries of the double irish and dutch sandwich tax strategy include software manufacturers and. Money goes to the subsidiary in ireland which holds the intellectual property ip. But, ireland doesnt tax some payments made to other eu states, so the money is.
Profits are sent to ireland which has a high tax rate. The classic double irish with a dutch sandwich dids in part i of this article, i discussed the mechanism by which some very prominent u. The recipe of a double irish dutch sandwich is rather easy. To fully understand this structure, we will focus on apple, inc. Google avoids tax with double irish dutch sandwich the. The double irish corporation strategy is often used in conjunction with a dutch company called the double irish dutch sandwich tax strategy. Double irish with a dutch sandwich definition investopedia. It is a technique employed by certain large corporations, involving the use of a combination of irish and dutch subsidiary. Culhane meadows pllc beps double irish dutch sandwich. Silicon valley fights to keep its dutch sandwich and double irish loopholes taxes on tech firms are going to go up and they are squealing like stuck pigs. Dutch words for sandwich include sandwich, broodje, boterham, dubbele boterham, inklemmen tussen and inschuiven. The dutch sandwich and the double irish are exactly the same thing.
They both love a double irish with a dutch sandwich. Presentation about the dutch sandwich or the double irish. Steve jobs and his lawyers found a loophole in the irish tax system. Could someone explain about double irish and dutch. The double irish is a base erosion and profit shifting beps corporate tax tool, used mostly by us multinationals since the late 1980s, to avoid corporate taxation on most nonu. Imf explains double irish dutch sandwich tax avoidance.
First, we set up and two irish corporations and a dutch corporation. The underlying tax principle of a double irish are provisions in the irish tax laws according to which a corporation is only subject to corporate tax, if it is registered in ireland and it has its. The views expressed in this report are those of the authors and are fully independent of the views of its sponsors. The scheme involves sending profits first through one irish company, then to a. The double irish with a dutch sandwich is a tax avoidance technique employed by certain large corporations, involving the use of a combination of irish and dutch subsidiary companies to shift. Intellectual property law solutions to tax avoidance pdf. Double irish with dutch sandwich arrangement slideshare. The double irish tax structure is well known by companies, and a lot of mnes are applying it. Double irish with dutch sandwich is just one of a class of similar international tax avoidance schemes. Conduit country the netherlands in the spotlight cpb. An accounting strategy used by hundreds of us based corporations to reduces taxes by routing profits through irish subsidiaries and the netherlands and then to the caribbean. First you need to understand the entities us company us1 this is typically the original entity irish company ir1 irish company ir2 netherland company ne tax haven company th could be any country with no corporate tax, but typically is one of.
Multinational firm x, headquartered in the united states, has an opportunity to make profit in say the united kingdom from a product that it. Homework assignment briefly describe what is double irishdutch sandwich. Because of a quirk in irish law, if the irish subsidiary is controlled by managers elsewhere, like the caribbean, then the profits can skip across the world taxfree. The following report studies a tax strategy called the double irish and dutch sandwich method, successfully helping many major u. According with the website, double irish with a dutch sandwich is a tax avoidance technique employed by certain large corporations, involving the use of a combination of irish and dutch subsidiary companies to shift profits to low or no tax jurisdictions. The double irish with a dutch sandwich is a tax avoidance technique employed by certain large corporations, involving the use of a. Double irish with a dutch sandwich related article.
Few years after it was founded, apple set up two subsidiaries in ireland that is. This method, and others similar to it you can just double irish and not dutch sandwich, or use a different country to start with is very popular with wealthy technology companies. The double irishdutch sandwich corporate taxdodge crisis. Google is a multinational technology company, which tries to benefit from every possible and legal way of paying low tax. The dutch sandwich therefore behaves like a backdoor out of the eu corporate. Traditionally, it was also used with the dutch sandwich beps tool. But if medtronics management has its way, the company will soon become irish. This video is created and made available for educational purposes only.
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