Corporation tax in the Republic of Ireland
Ireland's Corporate Tax System is a central component of Ireland's economy. In 2016–17, foreign firms paid 80% of Irish corporate tax, employed 25% of the Irish labour force, and created 57% of Irish OECD non-farm value-add. As of 2017, 25 of the top 50 Irish firms were U.S.–controlled businesses, representing 70% of the revenue of the top 50 Irish firms. By 2018, Ireland had received the most U.S. § Corporate tax inversions in history, and Apple was over one–fifth of Irish GDP. Academics rank Ireland as the largest tax haven; larger than the Caribbean tax haven system.
Former Finance Minister, Charlie McCreevy, reduced Irish corporate tax from 32% to 12.5% in the 1999 Finance Act, and whose 1997 Tax and Consolidation Act laid the framework for Ireland's BEPS tax tools.
Ireland is ranked as one of the largest global Conduit OFCs in terms of connections to corporate tax havens, the largest global Tax Haven in terms of quantum of profits shielded, and the 3rd-largest global Shadow Banking OFC.
Irish Corporation Tax as a % Irish Exchequer Tax has between 10% and 16% of Total Irish Tax. Source: Department of Finance (Ireland)
Effect of Ireland's Corporate Tax system on Ireland's relative GNI-per-capita to the EU average
The Double Irish arrangement was a base erosion and profit shifting (BEPS) corporate tax avoidance tool used mostly by United States multinationals since the late 1980s to avoid corporate taxation on non-U.S. profits. It was the largest tax avoidance tool in history and by 2010 was shielding US$100 billion annually in US multinational foreign profits from taxation, and was the main tool by which US multinationals built up untaxed offshore reserves of US$1 trillion from 2004 to 2018. Traditionally, it was also used with the Dutch Sandwich BEPS tool; however, 2010 changes to tax laws in Ireland dispensed with this requirement.
International Financial Services Centre (IFSC), centre of US multinational tax planning in Ireland
Former Finance Minister Michael Noonan closed the Double Irish BEPS tool to new entrants in October 2014 (existing schemes to close by 2020), but expanded the CAIA BEPS tool as a replacement in 2011–2016, and infamously told an Irish MEP who alerted him to the Single Malt BEPS tool, to "put on the green jersey".
The EU Commission's diagram of Apple's "Double Irish" BEPS tool
Margrethe Vestager, announcing Apple's €13 billion fine for Irish taxes avoided from 2004 to 2014 via an illegal "Double Irish" BEPS scheme