Sir, – Over the past week letter writers have outlined how many bike sheds or hospitals could be built with the Apple windfall. Others have offered some questionable commentary on the Irish corporation tax regime. Not for the first time, Eoin Burke-Kennedy cuts through the fog (“US, not Ireland, facilitated Apple’s €13.8bn tax-avoidance structure”, Economics, September 16th).
Many commentators on the Apple case were exercised by non-resident companies, which happen to be incorporated in Ireland.
As they correctly note, companies that are incorporated in Ireland but are managed and controlled in the US might not, under the tax law prevailing before 2014, be tax-resident in either country.
The US adopts a place-of-incorporation test for corporate tax residence while Ireland generally follows a management-and-control test and has done for decades. What has not been evident from much of the press coverage or political commentary is that, as Mr Burke-Kennedy points out, it is the US and not Ireland, that has been the outlier in this regard.
Great places for sunny outdoor dining around Dublin
Children protest outside Dáil over failure to provide Irish-medium secondary school
Could Shedeur Sanders ever really be another Tom Brady after phone faux pas and NFL draft snub?
Would I use a driverless taxi again? It obeyed traffic signs, stopped for pedestrians and drove cautiously
Almost all countries, in their bilateral double tax treaties, follow the OECD Model Tax Convention in using the place of effective management of a company to resolve cases of a company that is tax-resident under domestic law in both countries. Ireland, in its double tax treaties, follows the OECD model in this matter. The US does not.
The US has been struggling for 60 years to design a system to tax the offshore profits of its multinational corporations. Their system is a mess.
The late senator John McCain, who led the charge against the Irish corporate tax system, was in the US senate for more than half of that time. It is second nature for a politician who is part of a problem to look elsewhere for a whipping boy. The problem lies in US tax law. I would venture that the solution would also be found there if US politicians really wanted to track it down. Mr Burke-Kennedy not unreasonably wonders if the appetite was ever there on the US side. – Yours, etc,
PAT O’BRIEN,
Rathmines,
Dublin 6.
Sir, – There are so many ways of using the €13 billion that we’re at risk of becoming architects of our own windfall. – Yours, etc,
MICHAEL KEEGAN,
Booterstown,
Co Dublin.
