Monday, November 3, 2014

Ireland, The Double Irish, Corporate Tax Inversions, Aversions or Avoidance?

Ireland Phases Out Tax Break as Overseas Pressure Mounts - Bloomberg: "... The “Double Irish,” which allows companies to avoid paying tax on much of their income, will be closed to new entrants from January, Finance Minister Michael Noonan said in parliament in Dublin today, as he laid out the 2015 budget. Companies already enjoying the tax break can continue to do so until 2020...."

Aversion to Inversions: "In the face of inaction on comprehensive reform, and fearing that the Obama administration might crack down on inversions, corporations may be rushing to complete them as a form of “‘self-help’ territorial taxation,” according to Philip Cohen, a tax professor at Pace University’s Lubin School of Business. “Companies are witnessing other companies engaging in transactions that get around [Section 7874 of the Internal Revenue Code of 1986], often by merging with a smaller foreign target, and asking, ‘Why not consider it, given the upside?’” he says."


 

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