Death of the Double Irish?

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By TESTCustomwebLP TESTCustomwebLP October 1, 2014 20:19

Death of the Double Irish?

A year or so ago we reported here that one of our most reliable contacts within the European Commission (EC) had been privy to conversations where the Irish tax regime was the number one target for many commissioners. For that feature we also had word from within the Irish cabinet that an EC crackdown was “on the cards”. At that time the EC had other worries with Italian, Greek, French and Cypriot economic problems, German deflation and so on. This feature received more reader replies than most over the past five years such is the level of commitment to the Republic of Ireland by the aviation sector.

Now though, two weeks before the Irish budget, the alleged tax deals between the Irish government and Apple currently under investigation by the EC threaten to give the EC the excuse it needs to once and for all force the closure of the famous Double Irish tax loophole. The Irish government knows only too well that its budget in a few days will now be under very close scrutiny indeed by the EC. Irish Finance Minister Michael Noonan himself stated last week that the international community was watching. In this statement he is also alluding to the fact that the OECD has protested over obvious facilitation of profit-shifting. The Double Irish as it is known allows foreign companies to reduce their tax rates to well below the (already very low) Irish rate of 12.5% – a fact that many of you reading this know only too well.

So will the Irish government risk its economic recovery by closing the Double Irish forever in the budget due in two weeks or will it pave the way for the same at a future date? This is a serious quandary for the Irish and a matter that will affect leasing companies in particular.

On the flipside of all of this is London. London could be the centre of global aviation leasing, but alas the cost of business is too great. Not so if the UK were to leave the EU in 2017 following a referendum (if one should happen). Then London would be free and clear to offer significant incentives to attract business away from Dublin.

At any rate this Irish budget in October 2014 will be one of the closest watched by the aviation community in many years – You have been warned.

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By TESTCustomwebLP TESTCustomwebLP October 1, 2014 20:19