'Double Irish With A Dutch
Sandwich', Please!
For many of you the title sounds like an order in Subway. But it is not. Especially to large corporations like Apple, Amazon, Starbucks and this list is endless...
'Double Irish with a Dutch Sandwich' is a tax avoidance scheme, according to which, firms make use of Irish and Dutch subsidiary companies to take advantage of low taxes or to get away without paying tax at all.
The technique involves sending profits first through one Irish compony, then to a Dutch company and finally to a second Irish compony, which is headquartered in a tax haven. As a result, businesses can absolutely legally move their profits from countries with high tax rates to countries with zero tax rates. That way, Starbucks, for instance, have paid total os $13 million in British corporate taxes over 15 years while its revenue exceeded $5 billion. Amazon at the same time paid £2.4m in corporate taxes last year, despite making sales of £4.3.
Here is the recipe Apple was following for years, which helped the firm decline any tax residence, no corporate income tax and no income tax return to any national government from 2009 to 2012, when its net income was reported to be $30bn. I personally do not recommend to follow this recipe as you might end up explaining the recipe instructions not to your friends but before a Senate panel.
There is the full list of firms who were quite brave to play dangerous games with the governments.
Adobe Systems
Apple
Eli Lilly and Company
Facebook
Forest Laboratories
General Electric
Google
Johnson & Johnson
Microsoft
Nederlandse Spoorwegen
Oracle
Pfizer
Starbucks
Another feature of the 'Double Irish with a Dutch sandwich' the
businesses were benefiting from was the Dutch extensive network of investment
treaties around the world. If you were to establish an operation in the Netherlands, it can also give the access to different investment schemes.
The economic crisis forced businesses to look for new techniques that would help them stay in the line of business. An even though governments may not like such brilliant ideas of large corporations, the schemes seem to be completely legal and workable. For me it raises the question of not only changing the tax system but also taxing the rich more in other ways as Paul Krugman argues in the Munk Debate(there will be a review to it a bit later).
The increasing government chase of corporate taxes makes me think that political leaders have probably run out of the policy measures to revive our economy, and they try to improve techniques of holding businesses to account. The survival of the world is in the hands of the rich. But do they agree to save us? Who cares?! Nowadays, the ones who have money should share, share a lot. Legally of course.
Not as it was the case of Yevgeny Chichvarkin, when he was put him under the great pressure of the government which in the end forced him to sell its large corporation under the real market price.
The economic crisis forced businesses to look for new techniques that would help them stay in the line of business. An even though governments may not like such brilliant ideas of large corporations, the schemes seem to be completely legal and workable. For me it raises the question of not only changing the tax system but also taxing the rich more in other ways as Paul Krugman argues in the Munk Debate(there will be a review to it a bit later).
The increasing government chase of corporate taxes makes me think that political leaders have probably run out of the policy measures to revive our economy, and they try to improve techniques of holding businesses to account. The survival of the world is in the hands of the rich. But do they agree to save us? Who cares?! Nowadays, the ones who have money should share, share a lot. Legally of course.
Not as it was the case of Yevgeny Chichvarkin, when he was put him under the great pressure of the government which in the end forced him to sell its large corporation under the real market price.
