Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
THE OECD WILL recommend new measures to crack down on “Double Irish”-style loopholes which allow multinational companies to legally shift their profits offshore to avoid paying tax.
In a report to be released later today, the Paris-based body is scheduled to back international moves to cut down on corporate tax evasion.
The issue is particularly relevant to tech businesses which have global operations without a strong footprint in many of the countries where they make their money.
The OECD’s investigation into profit shifting was launched to give governments ways to fight corporate tax schemes which allowed profits to “disappear” offshore.
It has previously flagged making companies resident for tax purposes in any country where they had a “significant digital presence”, such as a big customer base.
The topic will also be high on the agenda at this weekend’s G20 meeting, where finance ministers are anticipated to talk about the issue after a previous agreement to share information and make international tax dealings more open.
Multinational companies such as Google, Ikea and Apple have all been accused of dodging tax in various countries by shifting income overseas.
One controversial scheme is the so-called “Double Irish with a Dutch Sandwich”, which involves big businesses exploiting variations in different countries’ tax laws to maximise their bottom lines.
Dutch Sandwich? Sounds delicious
The loopholes describe legal methods companies use to minimise their tax bills by playing on quirks in the tax systems of Ireland and other countries.
Multinationals like Google can avoid paying tax by shifting income between two subsidiaries – one with its business address in Ireland and another in a tax haven like Bermuda.
Companies based in Ireland already enjoy the country’s low corporate tax rate of 12.5%, while Bermuda has no corporate tax at all.
Irish laws only demand companies pay local tax if its main business address is in the country, although money shifted between two companies that come under the banner of one parent are still supposed to be taxable.
That’s where the Dutch Sandwich comes in.
Ireland doesn’t tax some transfers within the EU and the Netherlands doesn’t tax outbound royalties so multinationals can use a string of holding companies to shift their profits from Ireland to the Netherlands and then on to Bermuda effectively tax free.
Everyone’s a critic
The US, where many major tech companies are born and do the lion’s share of their business, has been a vocal critic of tax loopholes which allow businesses to shift their profits offshore and avoid its revenue authorities.
Other nations, including the UK and Australia, have complained about companies like Google making billions in advertising revenue within the countries but paying a pittance in local tax.
But the Irish government has always defended its tax practices and claimed a global approach was the only way to deal with international tax avoidance.
To embed this post, copy the code below on your site
I stopped reading at “85% of jobs available in 2030 haven’t been invented yet”. There’s slightly more than 8 years left in that prediction and I doubt if it’s anywhere near true. The prediction itself is 5 years old so we should be close to 40% new jobs never before heard of. (And probably that’s 100% in the private sector because government hasn’t changed much since the 19C.)
Maybe covid slowed it down.
My prediction for 2030 – there will be construction workers, shop workers, plumbers, electricians, drivers, nurses, port workers, chefs, waitress, government workers, accountants, real estate agents, accounts and office workers in general (most of whom will be doing what they do now). I’m sure there will be some new jobs, too
The tech industry is full of hype.
@john smith iv: Totally agree. F$(k coding. Science and nature all the way.
@john smith iv: naw, they might change the names but they’ve already been invented ,, people are getting more niche that’s all. We are still going to need plumbers electricians etc.. still need farmers , doctors the world has always moved on.. even without us on it..
Stick to farming. Energy crises are guan be common.
We also need artists jewellery makers, cabinet makers, singers, songwriters, writers, poets, philosophers, naturalists, palaeontologists, dreamers, inventors, sculptors, architects, blacksmiths, farriers.
It’s a bad idea to focus on STEM as if those subjects were an end in themselves.
@Nick Caffrey: While I wholeheartedly agree we need people in all of those roles, the reality is that digital skills are hugely beneficial or maybe even required for most of them going forward.
Many design and craft roles can use digital skills to support or improve their business.
The ability to programme in a language like Python opens vast new landscapes of expression to artists, jewelers and architects.
The best explorations of the limits of digital tools like CAD, CNC machines and 3D printers that I’ve seen are by artists and craftspeople thinking outside the box.
In fact there are ongoing projects in Ireland looking opening opportunities at this area (Craft 4.0 and iAtelier)
Digital skills are not just STEM, they can be part of STEAM with arts in the mix.
have your say