Double Irish / Dutch Sandwich Concepts

Bean Counters: The Triumph of the Accountants and How They Broke Capitalism

by Richard Brooks · 23 Apr 2018 · 398pp · 105,917 words

money usually flows through a Dutch company to avoid a ‘withholding tax’ on payments directly to a recognized tax haven. This is the infamous ‘Double Irish’ (with ‘Dutch sandwich’) scheme. It relies on multiple flaws in tax law of the sort that other countries have long corrected but with which Ireland determinedly persists. As

…

, 82 DiPiazza, Sam, 242 dirty pooling, 63 discrezione, 26, 29 Disney, 171 Dissenters, 43 dividends, 31, 39, 45 Donovan, John, 116–17 Doty, James, 260 ‘Double Irish’ scheme, 164 double-entry bookkeeping, 3–4, 6, 18, 22–41, 42–4, 96 Bank of England, 38 and Catholicism, 24–5, 26, 29, 34

The Raging 2020s: Companies, Countries, People - and the Fight for Our Future

by Alec Ross · 13 Sep 2021 · 363pp · 109,077 words

, the offshore world is out of your reach. With that in mind, we will go back to Google. THE DOUBLE IRISH WITH A DUTCH SANDWICH Between 2004 and 2019, Google used a pair of profit-shifting maneuvers—the “Double Irish” and “Dutch Sandwich”—to move the vast majority of its global earnings into Bermuda. Different versions of the

…

Double Irish were also used by Facebook, Pfizer, Coca-Cola, Cisco, and other American multinationals. The maneuver follows the same basic logic as your

…

forced to abandon this specific practice in 2020, after Ireland closed one of the necessary tax loopholes, but for fifteen years it used the Double Irish with a Dutch Sandwich to reduce its tax bill by tens of billions of dollars. In 2016 alone, the arrangement helped Google keep an estimated $3.7 billion

…

the Netherlands and then back to Ireland (but actually Bermuda) without losing a penny to taxes. From Ireland to the Netherlands to Ireland—a Double Irish with a Dutch Sandwich. Like its Dutch counterpart, Google Ireland Holdings (which is domiciled in Bermuda) does not employ a single person. The company shares its registered address

…

legality of tax avoidance is used by many business leaders to justify their strategies. Eric Schmidt, CEO of Google at the time it adopted the Double Irish, pointed out that it was commonplace among major companies to use such techniques. “We were following the global tax regime in the same sense that

…

have a greater impact on the developing world than any acts of philanthropy or foreign aid. The reason we know about Google and its Double Irish with a Dutch Sandwich is largely because the company continued to use the setup for years after it had been exposed. It sparked outrage, but it was still

…

confirmed it would abandon the structure. And by then, similar maneuvers had already started cropping up to replace the banned scheme. A further reason the Double Irish, Dutch Sandwich got so much attention in the first place was that Google and the other multinationals that used it were among the highest-profile and most

…

menu. These measures addressed the specific techniques used for a particular type of tax avoidance but did not solve the underlying problem. For every Double Irish with a Dutch Sandwich, there are dozens of equally tricky maneuvers that are known only to the lawyers and accountants who dream them up, as well as the

…

put them to use. The offshore world is like an iceberg, with the vast majority out of sight. Even right in Ireland, just as the Double Irish was phasing out, a replacement quietly entered stage left. When one Irish lawmaker, Matt Carthy, pointed out to the finance minister that revised legislation still

…

returns in any country. In 2014, the company paid a tax rate of roughly 0.005 percent on its global profits. This was not a Double Irish arrangement, but a close cousin that was later ruled to be an inappropriate sweetheart deal that Irish authorities had granted. Apple and Ireland won an

…

1 and 3 percent. This new tax avoidance maneuver was one of the very loopholes that Irish lawmakers had quietly left open when reforming the Double Irish. Fittingly, the scheme has been dubbed the “Green Jersey,” and it is gaining popularity among companies that trade in intellectual property. It lets companies knock

…

billions of dollars off their tax bills, just like the Double Irish, but now their profits and intellectual property never have to leave Europe. The Green Jersey does not rely on an Irish company based in a

…

tax haven, the now-outlawed arrangement that underpinned the Double Irish. Instead, the Irish company is borrowing money and buying intellectual property from separate tax haven subsidiaries. The 2014 reform does not apply. Like other tax

…

financial flows estimated that companies drained $50 billion from the continent annually. And while the US or EU might have the tools to investigate a Double Irish scheme or more brazen money laundering, this is much rarer in poorer nations, especially as the globe continues to race to the bottom. Financial secrecy

…

, globally optimized tax structures is costly, and more and more companies are having a difficult time defending them in court. For example, Google’s Double Irish with a Dutch Sandwich did not escape the attention, and anger, of European tax authorities. The company has been sued in several jurisdictions, and in 2017, Google settled

…

,” Guardian, January 1, 2020, https://www.theguardian.com/technology/2020/jan/01/google-says-it-will-no-longer-use-double-irish-dutch-sandwich-tax-loophole. Google was forced to abandon: Toby Sterling, “Google to End ‘Double Irish, Dutch Sandwich’ Tax Scheme,” Reuters, December 31, 2019, https://www.reuters.com/article/us-google-taxes-netherlands-idUSKBN1YZ10Z; Jeremy Kahn, “Google

…

’s ‘Dutch Sandwich’ Shielded 16 Billion Euros from Tax,” Bloomberg, January 2, 2018, https://www.bloomberg.com/news/articles/2018-01-02

…

/google-s-dutch-sandwich-shielded-16-billion-euros-from-tax. Created in 2003, this Irish company: “Google Ireland Ltd.,” Bloomberg, March 16, 2020, https://www.bloomberg.com/profile/company/

…

Statements for the Year Ended 31 December 2018, 10, accessed April 2020. Through an agreement with Alphabet: George Turner, “Why the End of Google’s ‘Double Irish’ Tax Avoidance Will Come with a Nasty Hangover,” New Statesman, January 3, 2020, https://www.newstatesman.com/politics/economy/2020/01/why-end-google-s

…

-double-irish-tax-avoidance-will-come-nasty-hangover. the company’s only physical presence on the island: Tim Sculthorpe, “The Post Box in Bermuda Numbered 666 Which

…

. In 2014, under heavy pressure from the EU: Sam Schechner, “Ireland to Close ‘Double Irish’ Tax Loophole,” Wall Street Journal, October 14, 2014, https://www.wsj.com/articles/ireland-to-close-double-irish-tax-loophole-1413295755; Toby Sterling, “Google to End ‘Double Irish, Dutch Sandwich’ Tax Scheme,” Reuters, December 31, 2019, https://www.reuters.com/article/us-google

…

, Sindika Dolber, Brian Dominican Republic, corporate tax rate in Donne, John dos Santos, Isabel dos Santos, José Eduardo dos Santos, José Filomeno “Double Irish” profit sharing Drivers Bill of Rights “Dutch Sandwich” profit sharing East Asia. See also specific countries East India Company. See British East India Company eBay economic concentration economic crises Edelman

…

(IRS) International Monetary Fund (IMF) International Rescue Committee (IRC). See also Red Cross International Traffic in Arms Regulations (ITAR) internet companies iPhone Ireland. See also “Double Irish” profit sharing Iron Curtain Iron Rice Bowl Isle of Man Italy Japan Japanese prisoners of war Jefferson, Thomas Jersey Jeune, Reg Johnson & Johnson Jones, Gary

Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens

by Nicholas Shaxson · 11 Apr 2011 · 429pp · 120,332 words

Google Inc. cut its taxes by $3.1 billion in the previous three years through transfer pricing games known by names such as the “Double Irish” and “Dutch Sandwich,” ending up with an overseas tax rate of 2.4 percent.7 The problem is getting worse. Microsoft’s tax bill has been falling sharply

…

. How to square this circle? At first, they settled for a compromise. American corporations could cook up a version of what was known as a “Dutch Sandwich”—set up an offshore finance subsidiary in the Netherlands Antilles, then use it to issue tax-free Eurobonds and send the proceeds up to the

…

treaty with this former Dutch colony via its postcolonial relationship with the Netherlands. The U.S. Internal Revenue Service could easily have decided that the Dutch Sandwich was a sham and taxed the income. But it looked the other way. “These were Eurobonds, bearer bonds, which were virtually impossible to tax,” explained

…

double taxation, 26, 41–2, 130, 146 defined, 26 “Double Irish,” 14 drug money, 6, 9, 18, 20, 22, 26–7, 29, 88, 101–2, 111, 120, 131–3, 136 du Pont, Pierre S. (“Pete”), 194–9 Dubai, 19 Duggan, Nick, 165–6 “Dutch Sandwich,” 14, 117 Dutch Special Financial Institutions, 27 Dumas, Roland

…

, 116 central figure of: See Wall Street and corporate governance, 122–5 and crime, 21–2, 24–5, 109–13 and deficit financing, 9 and “Dutch Sandwich,” 117 and Gordon report, 117 on the federal level, 21, 107–20 history of, 107–28 legislation: See Qualified Intermediary Program and limited liability corporations

Liars and Outliers: How Security Holds Society Together

by Bruce Schneier · 14 Feb 2012 · 503pp · 131,064 words

development. It can also happen deliberately, when laws are miswritten to enable the skillful few to evade them. Examples of accidental loopholes are the “Double Irish” and “Dutch Sandwich” loopholes that allow multinational corporations to avoid U.S.—and other—taxes.14 It's how Google pays only 2.8% of profits in tax

…

lawsuit. Additionally, market competition encourages sellers to ignore moral pressure as much as they can. Imagine if you were in a corporate boardroom, discussing the Double Irish tax loophole and how it could save your company millions. After it has been explained how the maneuver is perfectly legal, and how other companies

…

and Its Policy Implications,” Journal of Public Policy & Marketing, 25:117–26. two Irish subsidiaries Joseph B. Darby III and Kelsey Lemaster (15 May 2007), “Double Irish More than Doubles the Tax Savings,” Practical US/International Tax Strategies, 11:2,11–16. bigger one opened up Todd Neeley (28 Mar 2011), “Pulp

A Fine Mess

by T. R. Reid · 13 Mar 2017 · 363pp · 92,422 words

billion beyond the reach of the tax authorities—was actually not as convoluted as another tax-dodging contraption, the intricate mechanism known as a “Double Irish with a Dutch Sandwich.” This one works nicely to shield profits from the tax man for companies that have a good deal of intellectual property, like search engines

…

, software, cancer drugs, or computer operating systems. The “Double Irish” has been used by the likes of Apple and Microsoft, but it’s generally agreed, among aficionados

…

aside and let it happen. This is partly because the corporations hire sophisticated tax accountants and law firms to make sure that maneuvers like the “Dutch Sandwich” fall within the precise parameters of the tax code. But it’s also because the IRS, facing budget cuts year after year from a hostile

…

tax authorities in several countries dropped some of the gimmicks they had used to lure foreign corporations; thanks to the European Union crackdown, the notorious “Double Irish” is no longer a viable path toward tax avoidance. Of course, the tax lawyers immediately started designing new ways for companies to duck taxation. — THE

…

Google Billions in Taxes,” Bloomberg Businessweek, Oct. 22, 2010. Another excellent explanation of Google’s “Double Irish” system can be found in Cyrus Farivar, “Silicon Valley Fights to Keep Its Dutch Sandwich and Double Irish Loopholes,” Ars Technica, Jan. 20, 2014. 8. Offshore Profit Shifting and the U.S. Tax Code—Part 1 (Microsoft and Hewlett

…

, 64–66, 69–70 derivatives, 181, 184 dividends, 6, 9, 23, 36, 55, 70, 111, 147, 168, 170, 173, 193, 233, 241, 254, 256 “Double Irish with a Dutch Sandwich,” 151–53, 161, 164 Douglas, Roger, 60–61 dynamic scoring theory, 101 earned income tax credit (EITC), 210, 217–18, 238, 250 East Asia

…

, 28–32, 35–48, 126 tax avoidance, 73, 213, 215, 232, 241, 252 and citizenship, 194–95 critics of, 66, 158–64, 199, 204 “Double Irish with a Dutch sandwich,” 151–53, 161, 164 earnings skimming, 155, 163, 166 inversion, 154–58, 161–62 investigations into, 51, 149–51, 154, 162–64, 198–99

The Corruption of Capitalism: Why Rentiers Thrive and Work Does Not Pay

by Guy Standing · 13 Jul 2016 · 443pp · 98,113 words

just 5 per cent) are among countries that operate a patent box. Ireland, which under pressure closed a related tax-dodging loophole known as the ‘Double Irish’, is introducing a patent box with a concessionary rate of 6.25 per cent. The ostensible purposes of patent boxes are to encourage firms to

…

rental income. Even more egregiously, some multinationals have exploited anomalies in the tax rules of different jurisdictions, using devices such as Google’s famous ‘Double Irish with a Dutch sandwich’ to move profits to tax havens such as Bermuda where the corporate tax rate is zero. In 2011, nineteen subsidiaries registered in Ireland used

…

the ‘Double Irish’ to avoid tax on €33 billion of profits, equivalent to a fifth of the country’s economic output that year. Perhaps the biggest source

…

Didi Kuaidi 1 digital platforms see rentier platforms direct subsidies 1 Discipline and Punish 1 Disney 1, 2 ‘distress’ debt 1 Doha Round 1, 2 ‘Double Irish’ 1, 2 Draghi, Mario 1, 2, 3 Drutman, Lee 1 Dudley, William 1 Duncan Smith, Iain 1 Dutch Disease 1 ‘earnings stripping’ 1 Easton, Jim

Makers and Takers: The Rise of Finance and the Fall of American Business

by Rana Foroohar · 16 May 2016 · 515pp · 132,295 words

it especially easy to shift profits to the cheapest possible tax jurisdiction, regardless of where they really came from. Ever hear of a double Irish? How about a Dutch sandwich? These aren’t cocktails or bar snacks but rather complex financial strategies used by many American companies to transfer profits they earn abroad to

…

remains the largest and most immediate fight. The US code is ripe for an overhaul, in both the corporate and the consumer sphere. Tax inversions, Dutch sandwiches, and Cayman Islands wizardry that expatriate the gains of American corporations to enrich a tiny managerial caste suggest a whole new genre of selfish capitalism

…

it. How do Apple and other US firms keep their cash abroad, and do it legally? That’s where the crazy loopholes come in. A “double Irish,” for example, involves a US corporation setting up an Irish company and reregistering this company again to a low-tax or nontax country, like the

…

the knowledge economy, where the innovation actually occurred, to a different economy that offers the cheapest cash haven. Firms can go further and add a “Dutch sandwich” onto this maneuver. Because there are European Union tax agreements in place that allow money to move freely between EU countries, American firms can set

…

U.S. Senate Committee on Finance Hearing titled “Tax: Fundamentals in Advance of Reform,” April 15, 2008. 13. Author reporting; Sam Schechner, “Ireland to Close ‘Double Irish’ Tax Loophole,” Wall Street Journal, October 14, 2014. 14. “A Senseless Subsidy: Ending the Debt Addiction,” Economist, May 16, 2015. 15. David Henry, “Corporate America

Why We Can't Afford the Rich

by Andrew Sayer · 6 Nov 2014 · 504pp · 143,303 words

legal system. While the little people pay their taxes for all these things and more, many incredibly wealthy companies free-ride on them. The double Irish and the Dutch sandwich Google’s sixth ‘core value’ is: ‘Do the right thing: don’t be evil. Honesty and Integrity in all we do. Our business practices

…

, using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. These strategies, known to lawyers as the double Irish and the Dutch sandwich, helped Google to reduce its overseas tax rate to 2.4%.65 Margaret Hodge, who chairs the UK parliament’s Public Accounts Committee, took

Economic Dignity

by Gene Sperling · 14 Sep 2020 · 667pp · 149,811 words

down their corporate tax rates or risk firms artificially shifting their profits to avoid paying taxes by using convoluted techniques with names like the “Double Irish with a Dutch Sandwich.” In 2015, 45 percent of the profits of multinational corporations based in the United States and other advanced economies were put on the books

Who Stole the American Dream?

by Hedrick Smith · 10 Sep 2012 · 598pp · 172,137 words

States and in other countries, too. Earlier this year, The New York Times reported that Apple had pioneered an accounting technique known as the “Double Irish with a Dutch Sandwich,” which cut Apple’s taxes drastically by routing profits through Irish subsidiaries to the Netherlands and then to the Caribbean. Today, hundreds of other

…

% on $171 Billion in Profits: Reap $62.4 Billion in Tax Subsidies,” Citizens for Tax Justice, June 1, 2011, http://www.ctj.org. 69 “Double Irish with a Dutch sandwich” Charles Duhigg and David Kocienieski, “How Apple Sidesteps Billions in Taxes,” The New York Times, April 29, 2012. 70 Paid only $3.3 billion