[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.