Measured praise from U.S. senators on Irish tax loophole change

Wed Oct 16, 2013 5:49am EDT
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By Kevin Drawbaugh

(Reuters) - Two senior U.S. senators on Tuesday lauded Ireland for its decision to close a loophole used by Apple Inc (AAPL.O: Quote) to shelter over $40 billion from taxation, but stressed questions linger about Dublin's role in corporate tax dodging.

"Ireland's promise to reform its tax rules to stop multinationals from using Irish subsidiaries to escape or defer paying taxes anywhere in the world is encouraging," senators Carl Levin and John McCain said in a joint statement.

"Important questions do remain, however," they said.

The Irish government said on Tuesday it planned to shut down a tax arrangement used by Apple, but would leave open a bigger loophole that means the computer giant may not pay more tax.

Edward Kleinbard, a former chief of staff to the U.S. Congress's Joint Committee on Taxation and now a professor at the University of Southern California Gould School of Law, described Ireland's move as "a very small step."

"The specific legislation ... proposed appears on its face to be relevant basically only to Apple," Kleinbard said.

An Apple spokeswoman declined to comment.

Levin, a Democrat from Michigan, chairs a Senate panel that in recent years has run the U.S. Congress's hardest-hitting tax-avoidance investigations. McCain, a former presidential candidate from Arizona, is the panel's top Republican.   Continued...