Ireland: Government to end controversial tax breaks

As the European Commission continues its investigation into foreign companies’ tax relationships with certain member states, Ireland has said it plans to phase out its tax program that offers tax breaks to corporations.

Reports say the provision will end next year, though companies already using the agreement will be allowed to enjoy its benefits through 2020.

The tax provision, known as the “double Irish,” allows companies to pay royalties to a subsidiary that, while based in Ireland, is in a tax bracket in a different country with no corporate income tax.

”I am abolishing the ability of companies to use the ‘double Irish’ by changing our residency rules to require all companies registered in Ireland to also be tax resident,” Ireland’s finance minister Michael Noonan said in an announcement before Parliament on Tuesday.

Noonan acknowledged increase scrutiny from across the globe against countries’ tax relationships with corporations. The Commission is currently investigating several foreign companies, including Apple, Starbucks and Fiat, and their own tax relationships with different member states, on suspicion the tax agreements constitute illegal state aid and unfair conduct.

Ireland’s relationship with Apple and Amazon are part of the Commission’s probe.

Full content: NYTimes

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