Why do multinational companies choose some cities over others? How do they make billions in profit despite high tax rates? These are all big, necessary questions that we have to ask. Ever since corporate personhood has become a thing, it’s hard to not get me worked up on this subject.
I first learned about Ireland being a crazy good tax haven for businesses like Apple from the short documentary called “Tax Free Tour.” Thanks to certain laws in a select few countries (Ireland, Netherlands, Luxembourg, Singapore, etc.) multinational companies are granted some little-known tax exemptions. These exemptions allow the MNCs to operate on an entirely different level than other companies, often allowing them to not pay a penny in taxes to their hosting countries.
Ireland, which has allowed some companies (mostly tech based, such as Google and Apple) to operate under a “Double Irish” system – in which a company is allowed to move their revenues into an Ireland-registered offshore tax haven, has now announced that within 4 years, they will be changing some of the rules. While a big change, they are still offering those companies a lower-than-average tax rate to keep them in the country. It is estimated that under this system, the country has saved tech companies billions of euros in taxes.
Don’t forget to check out the Tax Free Tour documentary below:
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