Slides from the presentation by Attac Ireland at the Attac European Summer University, Paris, Aug 2014

7. Over the last quarter of a
century something
fundamental seems to
have changed in the way
in which capitalism works.
The tendency since 1970
has been towards greater
geographical mobility of
capital.

12. Pot
of
gold
or
Fool’s
Gold?
Richard
Murphy
• Taxa:on
of
subsidiary
companies
–
allows
royal:es
to
be
paid
to
subsidiary
companies
resident
in
tax
havens,
avoids
residence
basis
for
taxa:on
• Taxa:on
of
dividends
–
dividends
from
tax
haven
subsidiaries
oCen
received
tax-­‐free
by
the
parent
company
in
Ireland
• ‘Thin
capitalisa:on’
–
financing
of
subsidiary
ac:vity
through
intra-­‐group
loans
rather
than
capitalisa:on,
and
manipula:on
of
interest
rates
to
receive
tax
‘relief’
• Corporate
secrecy
–
‘secrecy
jurisdic:on’
that
undermines
the
regula:on
of
another
domain
• ‘Light
touch
regula:on’
of
transfer
pricing
–
two
or
more
companies
that
are
part
of
the
same
parent
company
trade
with
and
loan
to
each
other

14. In
2009/10,
Ireland
had
inward
investment
of
$31.1bn.
Outward
investment
in
that
period
was
$31.0bn.
‘In
other
words,
Ireland
is
not
the
loca:on
in
which
foreign
direct
investment
is
taking
place’
(Murphy,
2011:
11)

36. Follow
the
money?

37. The
Double
Irish
• The
intellectual
property
(IP)
of
companies
such
as
Google,
Apple,
Facebook
are
registered
in
subsidiary
companies
in
Ireland.
• For
example,
Google
Ireland
Ltd.
is
the
Irish
subsidiary
of
Google
Inc.

38. § Google
Ireland
Ltd.
makes
all
its
money
through
selling
ads
§ If
a
person
in
Germany
buys
an
ad,
the
sale
is
recorded
in
Ireland
§ Royal:es
from
this
sale
accrue
to
Google
Ireland
Ltd.

39. However
…
• Irish
law
only
recognises
a
company
as
being
‘tax
resident’
in
Ireland
if
its
main
centre
of
business
is
in
Ireland.
• So
another
‘Irish’
company
is
established
in
a
tax
haven
such
as
Bermuda
(the
‘double
Irish’)
• E.g.
Google
Inc.
established
Google
Holdings
Ltd.
in
Bermuda

40. §
Management
team
based
in
Google
Holdings
Ltd,
Bermuda
§
Google
Ireland
Ltd
pays
royal:es
to
Google
Holdings
Ltd.
§ Bermuda
–
0%
corpora:on
tax.
§ Avoid
paying
tax
in
Dublin

41. • h_p://www.irishleCreview.org/2013/06/18/
explaining-­‐double-­‐irish-­‐map-­‐pile-­‐euro-­‐coins/

42. • Sincere
thanks
to
Conor
McCabe
for
sharing
his
research
on
the
IFSC
and
for
assis:ng
with
the
prepara:on
of
this
presenta:on.