Editing Corporate haven (section)

==IP–based Tax inversions==
{{main|Corporate tax inversion|Leprechaun economics}}
[[File:Ireland Trade Good Discrepancy (1995-2017).png|thumb|Apple's Q1 2015 Irish "quasi-inversion" of its $300bn international IP (known as [[leprechaun economics]]), is the largest recorded individual BEPS action in history, and almost double the 2016 $160bn Pfizer-Allergan Irish inversion, which was blocked.<br/><br/>[[Brad Setser]] & Cole Frank<br/>(Council on Foreign Relations)<ref name="cofr"/>]]

===Apple vs. Pfizer–Allergan===

Modern corporate tax havens further leverage their IP-based BEPS toolbox to enable international corporates to execute quasi-tax inversions, which could otherwise be blocked by domestic anti-inversion rules.  The largest example was Apple's Q1 January 2015 restructuring of its Irish business, Apple Sales International, in a quasi-tax inversion, which led to the [[Paul Krugman]] labeled "[[leprechaun economics]]" affair in Ireland in July 2016 (see article).

In early 2016, the Obama Administration blocked the proposed $160 billion Pfizer-Allergan Irish corporate tax inversion,<ref>{{cite news|url=https://www.independent.ie/business/irish/pfizer-pulls-out-of-140bn-irish-allergan-merger-34603518.html|title=Pfizer pulls out of €140bn Irish Allergan merger|newspaper=Irish Independent|date=6 April 2016|access-date=16 May 2018|archive-url=https://web.archive.org/web/20180708104847/https://www.independent.ie/business/irish/pfizer-pulls-out-of-140bn-irish-allergan-merger-34603518.html|archive-date=8 July 2018|url-status=live|df=dmy-all}}</ref><ref>{{cite news|url=https://www.bloomberg.com/gadfly/articles/2016-04-06/big-pharma-ruined-tax-inversions-for-everybody|title=Big Pharma Murdered Tax Inversions|newspaper=Bloomberg.com|publisher=Bloomberg News|date=6 August 2016|access-date=16 May 2018|archive-url=https://web.archive.org/web/20180417030218/https://www.bloomberg.com/gadfly/articles/2016-04-06/big-pharma-ruined-tax-inversions-for-everybody|archive-date=17 April 2018|url-status=live|df=dmy-all}}</ref> the largest proposed corporate [[tax inversion]] in history,<ref>{{cite news|title = US issues new rules to clamp down on tax 'inversions'|url = https://www.irishtimes.com/business/economy/us-issues-new-rules-to-clamp-down-on-tax-inversions-1.2829090|newspaper = The Irish Times|date = 16 October 2016|access-date = 16 May 2018|archive-url = https://web.archive.org/web/20180417022904/https://www.irishtimes.com/business/economy/us-issues-new-rules-to-clamp-down-on-tax-inversions-1.2829090|archive-date = 17 April 2018|url-status = live|df = dmy-all}}</ref> a decision which the Trump Administration also upheld.<ref>{{cite news|url=https://www.reuters.com/article/us-usa-tax-inversions/trump-to-keep-obama-rule-curbing-corporate-tax-inversion-deals-idUSKBN1C92RQ|title=Trump to keep Obama rule curbing corporate tax inversion deals|work=Reuters|date=4 October 2017|access-date=16 May 2018|archive-url=https://web.archive.org/web/20180616054152/https://www.reuters.com/article/us-usa-tax-inversions/trump-to-keep-obama-rule-curbing-corporate-tax-inversion-deals-idUSKBN1C92RQ|archive-date=16 June 2018|url-status=live|df=dmy-all}}</ref><ref>{{cite web|url=http://www.ey.com/Publication/vwLUAssets/Report_on_recent_US_international_tax_developments_-_20_January_2017/$FILE/2017G_00259-171Gbl_Report%20on%20recent%20US%20international%20tax%20developments%20-%2020%20January%202017.pdf|title=Global Tax Aleart Corporate Inversions|publisher=Ernst & Young|date=20 January 2017|access-date=16 May 2018|archive-url=https://web.archive.org/web/20180418225844/http://www.ey.com/Publication/vwLUAssets/Report_on_recent_US_international_tax_developments_-_20_January_2017/$FILE/2017G_00259-171Gbl_Report%20on%20recent%20US%20international%20tax%20developments%20-%2020%20January%202017.pdf|archive-date=18 April 2018|url-status=dead|df=dmy-all}}</ref>

However, both Administrations were silent when the Irish State announced in July 2016 that 2015 GDP has risen 26.3% in one quarter due to the "onshoring" of corporate IP, and it was rumoured to be Apple.<ref>{{cite news|url=https://www.irishexaminer.com/ireland/apple-tax-affairs-changes-triggered-surge-in-irish-economy-419912.html|title=Apple tax affairs changes triggered a surge in Irish economy|newspaper=The Irish Examiner|date=18 September 2016|access-date=16 May 2018|archive-url=https://web.archive.org/web/20180330012241/https://www.irishexaminer.com/ireland/apple-tax-affairs-changes-triggered-surge-in-irish-economy-419912.html|archive-date=30 March 2018|url-status=live|df=dmy-all}}</ref>  It might have been due to the fact that the [[Central Statistics Office (Ireland)]] openly delayed and limited its normal data release to protect the confidentiality of the source of the growth.<ref name="cso"/> It was only in early 2018, almost three years after Apple's Q1 2015 $300 billion quasi-tax inversion to Ireland (the largest tax inversion in history), that enough Central Statistics Office (Ireland) data was released to prove it definitively was Apple.<ref name="brads">{{Cite web|title=Apple's Exports Aren't Missing: They Are in Ireland|url=https://www.cfr.org/blog/apples-exports-arent-missing-they-are-ireland|publisher=Council on Foreign Relations|date=30 October 2017|access-date=16 May 2018|archive-url=https://web.archive.org/web/20180429025322/https://www.cfr.org/blog/apples-exports-arent-missing-they-are-ireland|archive-date=29 April 2018|url-status=dead|df=dmy-all}}</ref><ref name="cofr"/><ref name="cffy">{{cite web|url=http://economic-incentives.blogspot.ie/2018/01/what-apple-did-next.html|title=What Apple did next|publisher=Seamus Coffey, University College Cork|date=24 January 2018|access-date=16 May 2018|archive-url=https://web.archive.org/web/20180330153810/http://economic-incentives.blogspot.ie/2018/01/what-apple-did-next.html|archive-date=30 March 2018|url-status=dead|df=dmy-all}}</ref>

Financial commentators estimate Apple onshored circa $300 billion in IP to Ireland, effectively representing the balance sheet of Apple's non-U.S. business.<ref name="cofr"/>  Thus, Apple completed a quasi-inversion of its non-U.S. business, to itself, in Ireland, which was almost twice the scale of Pfizer-Allergan's $160 billion blocked inversion.

===Apple's IP–based BEPS inversion===

Apple used Ireland's new BEPS tool, and "[[double Irish]]" replacement, the "[[double Irish arrangement#Backstop of capital allowances|capital allowances for intangible assets]]" scheme.<ref name="cffy"/>  This BEPS tool enables corporates to write-off the "arm's length" (to be OECD-compliant), intergroup acquisition of offshored IP, against all Irish corporate taxes.  The "arm's length" criteria are achieved by getting a major accounting firm in Ireland's [[International Financial Services Centre, Dublin|International Financial Services Centre]] to conduct a valuation, and Irish GAAP audit, of the IP.  The range of IP acceptable by the Irish [[Revenue Commissioners]] is very broad.  This BEPS tool can be continually replenished by acquiring new offshore IP with each new "product cycle".<ref name="maples">{{cite web|url=https://www.scribd.com/document/377485537/Maples-and-Calder-Ireland-Intellectual-Property-2018|title=Maples and Calder Irish Intellectual Property Tax Regime - 2.5% Effective Tax|publisher=[[Maples and Calder]] Law Firm|date=February 2018|access-date=2018-05-13|archive-url=https://web.archive.org/web/20180516033549/https://www.scribd.com/document/377485537/Maples-and-Calder-Ireland-Intellectual-Property-2018|archive-date=2018-05-16|url-status=live}}</ref>

In addition, Ireland's 2015 Finance Act removed the 80% cap on this tool (which forced a minimum 2.5% [[Corporation tax in the Republic of Ireland#Effective tax rate (ETR)|effective tax rate]]), thus giving Apple a 0% effective tax rate on the "onshored" IP.  Ireland then restored the 80% cap in 2016 (and a return to a minimum 2.5% effective tax rate), but only for new schemes.<ref name="app2">{{cite web|url=https://www.independent.ie/business/budget/tax-break-for-ip-transfers-is-cut-to-80pc-36215540.html|title=Tax break for IP transfers is cut to 80pc|work=Irish Independent|date=11 October 2017|access-date=16 May 2018|archive-url=https://web.archive.org/web/20180322015127/https://www.independent.ie/business/budget/tax-break-for-ip-transfers-is-cut-to-80pc-36215540.html|archive-date=22 March 2018|url-status=live|df=dmy-all}}</ref><ref name="app1">{{cite news|url=https://www.irishtimes.com/business/economy/cliff-taylor-noonan-and-donohoe-rule-switching-could-cost-1bn-next-year-1.3283383?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Feconomy%2Fcliff-taylor-noonan-and-donohoe-rule-switching-could-cost-1bn-next-year-1.3283383|title=Change in tax treatment of intellectual property and subsequent and reversal hard to fathom|newspaper=The Irish Times|date=8 November 2017|access-date=16 May 2018|archive-url=https://web.archive.org/web/20180321151140/https://www.irishtimes.com/business/economy/cliff-taylor-noonan-and-donohoe-rule-switching-could-cost-1bn-next-year-1.3283383?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Feconomy%2Fcliff-taylor-noonan-and-donohoe-rule-switching-could-cost-1bn-next-year-1.3283383|archive-date=21 March 2018|url-status=live|df=dmy-all}}</ref>

Thus, Apple was able to achieve what Pfizer-Allergan could not, by making use of Ireland's advanced IP-based BEPS tools.  Apple avoided any U.S regulatory scrutiny/blocking of its actions, as well as any wider U.S. public outcry, as Pfizer-Allergan incurred.  Apple structured an Irish corporate effective tax rate of close to zero on its non-U.S. business, at twice the scale of the Pfizer-Allergan inversion.

{{quote|I cannot see a justification for giving full Irish tax relief to the intragroup acquisition of a virtual asset, except that it is for the purposes of facilitating corporate tax avoidance.|source=Professor Jim Stewart, Trinity College Dublin, "MNE Tax Strategies in Ireland", 2016<ref>{{Cite web|title=MNE Tax Strategies in Ireland|url=https://www.tcd.ie/business/assets/pdf/MNE-tax-strategies-and-ireland.pdf|publisher=Trinity College Dublin|date=2016|access-date=2018-05-16|archive-url=https://web.archive.org/web/20180426215449/https://www.tcd.ie/business/assets/pdf/MNE-tax-strategies-and-ireland.pdf|archive-date=2018-04-26|url-status=live}}</ref>}}