Elementary, My Dear Watson! The Curious Case of US Multinationals Fleeing to Ireland!

The Emerald Isle Enigma

The American Chamber of Commerce Ireland reveals a staggering 973 US firms have set up shop in Ireland. As I always say "It has long been an axiom of mine that the little things are infinitely the most important." And these little tax havens are no exception! Secretary Howard Lutnick seems rather perturbed hinting that this activity should 'return to the states'. Honestly the man makes it sound like errant sheep!

Apple's Taxing Tale

Ah yes Apple Microsoft and Pfizer – the usual suspects. They appear to have stashed away their intellectual property in Ireland a move as subtle as a foghorn. The European Commission noted that Apple's effective corporate income tax rate was below 1% in Europe back in 2014. Elementary my dear Watson! One might say they're as slippery as eels in a barrel of oil. The silence from Apple and Pfizer is deafening while Microsoft declined to comment how very telling.

The Disappearing Profits Ploy

According to Alexander Arnon these companies make profits vanish like smoke in the wind. "If you are Apple and you are raking in the profits from your iPhone sales you can make a lot of those profits just disappear from your taxable income," he said. It's a classic case of "Now you see it now you don't!"

A Nation's Gambit

Ireland's embrace of multinationals began in the 1980s following an economic crisis. It's a case of necessity being the mother of invention. Kevin Kent suggests that Ireland’s tax strategy was designed to make it more attractive in the '90s. “It helped that Ireland became part of the EU,” he noted. "Data! Data! Data!" I can't make bricks without clay! And in this case the data points to a deliberate strategy to lure in businesses with promises of lower taxes.

The Curious Case of the Double Irish

The "double Irish" strategy involved shifting intellectual property between subsidiaries in low tax countries. Adam Michel aptly describes it as an 'escape valve from high tax countries.' It seems the United States was unintentionally pushing companies away. As I always say "You see but you do not observe." One must pay attention to the unintended consequences!

The Game Afoot Continues

Though Ireland has revised its tax codes with the top corporate income tax rate rising to 15% in 2024 loopholes remain. Capital allowances for intangible assets keep the game afoot. Ireland with its educated workforce access to European markets and strong historical ties remains a siren call for US businesses. It appears the game is afoot and these companies are playing it with remarkable skill.