Double Irish arrangement

The Double Irish was a base erosion and profit shifting (BEPS) corporate tax used mostly by US multinationals since the late 1980s to avoid corporate on non-U.S. profits.

It was the largest tax avoidance in and by 2010 was shielding US$100 billion annually in US multinational foreign profits from , and was the main by which US multinationals built up untaxed offshore reserves of US$1 from 2004 to 2018.

Traditionally, it was also used with the Dutch  BEPS ; however, changes to Irish tax in 2010 dispensed with this requirement.

Former Minister Michael Noonan closed the Double Irish BEPS to new entrants in October 2014 (existing schemes to close by 2020), but expanded the CAIA BEPS as a replacement in 2011–2016, and infamously told an Irish MEP who alerted him to the Single Malt BEPS , to “put on the jersey”.

Despite US knowledge of the Double Irish for a decade, it was the that in October 2014 forced to close the scheme, starting in January 2015. However, users of existing schemes, such as Apple, Google, and Pfizer, were given until January 2020 to close them.

At the announcement of the closure it was known that multinationals had replacement BEPS in , the Single Malt (2014), and  Allowances for Intangible Assets (CAIA) (2009):

  1. Single malt is almost identical to the Double Irish, and was identified with (LinkedIn), and Allergan in 2017;
  2. CAIA can provide up to twice the tax shield of Single Malt, or Double Irish, and was identified with Apple in the 2015 leprechaun economics affair.

US tax academics showed as long ago as 1994 that US multinational use of tax havens and BEPS had maximized long-term US exchequer receipts.

They showed that multinationals from “territorial” tax systems, which all but a handful of countries follow, did not use BEPS , or tax havens, including those that had recently switched, such as (2009), and the UK (2009–12). By 2018, tax academics showed US multinationals were the largest users of BEPS and was the largest BEPS hub or tax haven.

They showed that US multinationals represented the largest component of the Irish and that had failed to attract multinationals from “territorial” tax systems.

The US switch to a “territorial” tax in the 2017 Tax Cuts and Jobs Act (“TCJA”), and caused US tax academics to forecast the demise of Irish BEPS and as a US corporate tax haven.

However, by mid-2018, other tax academics, including the IMF, noted that technical flaws in the TCJA had increased the attractiveness of 's BEPS , and the CAIA BEPS in particular, which post-TCJA, delivered a total effective tax rate (“ETR”) of 0–2.5% on profits that can be fully repatriated to the US without incurring any additional US .

In July 2018, one of 's leading tax economists forecasted a “boom” in the use of the Irish CAIA BEPS as US multinationals close existing Double Irish BEPS schemes before the 2020 deadline.

Last Updated on 2 years by pinc