Insight: Apple controversy lays bare complex Irish tax web

Sat Jul 13, 2013 5:08am EDT
 
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By Padraic Halpin, Carmel Crimmins and Himanshu Ojha

DUBLIN (Reuters) - Occupying a single floor of a three-storey building in a suburban Dublin office park, Western Union's offices are notably modest for the international headquarters of the world's largest money transfer firm.

The set-up is typical of swathes of U.S. companies using Ireland to cut their tax bill. A Reuters analysis of Irish and U.S. filings shows that more than 40 percent of the S&P 500 have registered subsidiaries in the country.

That nexus, which has created over 100,000 jobs for Ireland, was laid bare when the U.S. Senate revealed that technology giant Apple had paid little or no tax on tens of billions of dollars in profits channeled through the country.

Ireland, which has courted U.S. business for decades, rejects the Senate's claims that it is a tax haven, but the case has damaged its reputation as it seeks to emerge from an EU-IMF bailout and its export-focused economy dips back into recession.

Company documents in Ireland and filings in the United States shows that many firms have multiple units in Ireland, where corporate income tax is 12.5 percent - about a third of the top U.S. federal income tax rate of 35 percent.

In many cases, several subsidiaries are registered at the offices of Dublin-based law firms.

In Western Union's case, Unit 9, Richview Office Park houses 11 of its 12 Irish subsidiaries. The company made 92 percent of its pretax income outside the United States last year, although a fifth of its staff work in the country.

That allowed the Colorado-based company to cut its effective tax rate to 12.2 percent - about average for a large U.S. company.   Continued...

 
A man walks past the Richview Office Park which houses Western Union offices in Dublin July 8, 2013. REUTERS/Cathal McNaughton