Levin-McCain Statement on Ireland’s Decision to Reform its Tax Rules

Tuesday, October 15, 2013

WASHINGTON – Sens. Carl Levin, D-Mich., and John McCain, R-Ariz., chairman and ranking member, respectively, of the Permanent Subcommittee on Investigations, released the following statement on Ireland’s announcement [PDF] that it would reform tax rules that had allowed U.S.-based multinational companies to avoid paying billions of dollars in U.S. income taxes.

Levin and McCain held a May 2013 Subcommittee hearing that examined offshore profit shifting and tax avoidance by Apple using three Irish subsidiaries that claimed they were not tax residents anywhere.

 “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. Important questions do remain, however, including whether the new rules will continue to allow Irish subsidiaries to dodge taxes by, for example, excluding substantial income from the 12% Irish tax rate, calculating taxable income in ways that produce a lower effective tax rate, or simply declaring tax residency in a tax haven with no corporate tax.  Hopefully, the answers will demonstrate that Ireland is ready to close the door on these egregious corporate tax abuses enabling multinational tax avoidance.”