[s_dev]

Do you think they'd pay more or less tax in Dublin compared to £5k? Irelands 12.5% seems very reasonable considering its so close to its effective rate. France, Britain and Germany all allow massive write offs and loop holes that mean their effective rate is multiples lower than their stated corporate tax rate and this story will be forgotten by the Brits, Germans and French who'll turn around and repeat their condemnation of Ireland as a cheap tax haven when negotiating EU funding.

Starbucks get away with the same thing. Amazon intentionally doesn't turn a profit and so evades this whole situation altogether. Anyway Facebooks EMEA is already in Dublin.

[exDM69]

> Irelands 12.5% seems very reasonable considering its so close to its effective rate.

Very little of the actual profits of Facebook are actually subject to the 12.5% corporate tax of Ireland.

In a European corporate tax evasion scheme such as Facebook's, there's typically four to five legal entities in two or three countries. The branch making the actual profits (e.g. Facebook UK) pays their profits as "license fees" to an entity Netherlands or Luxembourg that has a flat-rate tax deal. This money is then transferred to the Irelands, where it stays for a few milliseconds before it is wired over to another corporate entity in NL/LUX ("license fees" again), subject to a flat rate fee, and then through ownership deals gets transferred back to Ireland. This trick is called the "double Irish with a Dutch sandwich", and there are dozens of similar, widely-employed schemes.

If this money is actually needed in the US, it gets funneled through one or two hops in Bahamas, Bermuda or Cayman Islands or so.

The net result is not 12.5%, more like (12.5%)^2 - (flat rates paid in NL/LUX). Effectively down to a few percent.

[orbifold]

Since this is well known, I'm really curious how a typical conversation about this scheme in one of the other EU countries looks like. Typical politicians are usually somewhat in the pockets of industry by getting payed for speaking engagements etc, but shouldn't they at least realize that it isn't really in the interest of their own country to let this happen?

[caskance]

Tax evasion is a crime. You're describing tax optimization.

[rmc]

It's always funny when Brits complain about foreign tax havens. The UK is a massive tax haven, with oodles of little overseas territories, or Isle of Man, or the Channel Islands.

[marrs]

Neither the Isle of Man nor the Channel Islands are a part of the UK.

[pjc50]

Urgh. This is part of the problem. They're Crown Dependencies. They're neither fully independent countries nor part of the UK. They're accountable to their own local electorates but host a lot of firms doing business that's really in other countries. They're ideal tax havens.

I am fond of the constitutional tweeness of Man, Sark, etc, but their situation really does need to be regularised.

[spacecowboy_lon]

The last time that was on the cards suddenly all the MP"s expenses got stolen then exposed by a news paper whose owners live on sark.

Not that I am saying the two are related of course Inocent Grin

[bpodgursky]

If the Isle of Man was invaded, the UK would be the one defending it.

The legal wordplay is irrelevant; it has no effective sovereignty if it cannot even put up a semblance of defending its own borders.

[JupiterMoon]

In general if we know about them (most people don't) we object to this just as much. NB the channel islands aren't strictly speaking a part of the UK.