Editing Corporate haven (section)

===Irish Section 110 SPV===
[[File:Stephen Donnelly 2016.jpg|thumb|'''[[Stephen Donnelly|Stephen Donnelly TD]]''' Estimated US distressed funds used Section 110 SPVs to avoid €20 billion in Irish taxes on almost €80 billion of Irish domestic investments from 2012 to 2016.<ref name="sd">{{cite web |url=http://stephendonnelly.ie/wp-content/uploads/2016/10/Closing-Down-Section-110-for-Vulture-Funds.pdf |title=Why Letting Section 110 SPVs Operate in the Irish Domestic Economy Will Damage Our Tax Base and Our Reputation As a 'Low-Tax' Economy |publisher=Stephen Donnelly (Dail Submission) |date=September 2016 |access-date=2018-05-19 |archive-url=https://web.archive.org/web/20171114101233/http://stephendonnelly.ie/wp-content/uploads/2016/10/Closing-Down-Section-110-for-Vulture-Funds.pdf |archive-date=2017-11-14 |url-status=dead }}</ref>]]

The [[Irish Section 110 Special Purpose Vehicle (SPV)|Irish Section 110 SPV]] uses complex securitisation loan structuring (including [[Orphan structure|"orphaning"]] which adds confidentiality), to enable the profit shifting.  This tool is so powerful, it inadvertently enabled US [[distressed debt]] funds avoid billions in Irish taxes on circa €80 billion of Irish investments they made in 2012-2016 (see [[Irish Section 110 Special Purpose Vehicle (SPV)#Abuses|Section 110 abuse]]).<ref name="l1">{{cite news|url=https://www.bbc.com/news/world-europe-37287182|title=Forget Apple: Ireland's other taxing issue|work=BBC News|date=6 September 2016|access-date=21 July 2018|archive-url=https://web.archive.org/web/20180627125139/https://www.bbc.com/news/world-europe-37287182|archive-date=27 June 2018|url-status=live|df=dmy-all}}</ref><ref name="l2">{{cite news|url=https://www.ft.com/content/619c9bde-74f3-11e6-bf48-b372cdb1043a|title=Ireland confronts another tax scandal closer to home|newspaper=Financial Times|date=11 September 2016|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180612143047/https://www.ft.com/content/619c9bde-74f3-11e6-bf48-b372cdb1043a|archive-date=12 June 2018|url-status=live|df=dmy-all}}</ref><ref name="nnn">{{cite news|url=https://www.independent.ie/opinion/comment/how-did-the-government-shaft-mortgage-holders-and-taxpayers-in-one-fell-swoop-34870748.html|title=How did the Government shaft mortgage holders and taxpayers in one fell swoop?|newspaper=Irish Independent|date=10 July 2016|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180428093455/https://www.independent.ie/opinion/comment/how-did-the-government-shaft-mortgage-holders-and-taxpayers-in-one-fell-swoop-34870748.html|archive-date=28 April 2018|url-status=live|df=dmy-all}}</ref><ref name="nna">{{cite news|url=https://www.independent.ie/opinion/columnists/colette-browne/vulture-funds-are-feasting-taxfree-on-carcass-of-our-property-crash-35005936.html|title=Vulture funds are feasting tax-free on carcass of our property crash|newspaper=Irish Independent|date=30 August 2016|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180428093528/https://www.independent.ie/opinion/columnists/colette-browne/vulture-funds-are-feasting-taxfree-on-carcass-of-our-property-crash-35005936.html|archive-date=28 April 2018|url-status=live|df=dmy-all}}</ref>  This was despite the fact that the seller of the circa €80 billion was mostly the Irish State's own [[National Asset Management Agency]].

The global securitisation market is circa $10 trillion in size,<ref name="jpm">{{cite web|url=https://www.morganstanley.com/im/publication/insights/investment-insights/ii_overviewofglobalsecuritizedassets_en.pdf|title=Global Securitisation Market|publisher=Morgan Stanley|date=2017|access-date=2018-05-13|archive-url=https://web.archive.org/web/20180317162303/https://www.morganstanley.com/im/publication/insights/investment-insights/ii_overviewofglobalsecuritizedassets_en.pdf|archive-date=2018-03-17|url-status=dead}}</ref> and involves an array of complex financial loan instruments, structured on assets all over the world, using established securitization vehicles that are accepted globally (and whitelisted by the OECD).  This is also helpful for concealing corporate BEPS activities, as demonstrated by sanctioned Russian banks using Irish Section 110 SPVs.<ref name="rus2"/><ref name="rus3"/>

This area is therefore an important new BEPS tool for EU corporate tax havens, Ireland and Luxembourg,<ref>{{cite news|url=https://www.independent.ie/business/irish/ireland-is-top-eurozone-jurisdiction-for-secretive-spvs-36047198.html|title=Ireland is top Eurozone jurisdiction for SPVs|newspaper=Irish Independent|date=19 August 2017|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180628235612/https://www.independent.ie/business/irish/ireland-is-top-eurozone-jurisdiction-for-secretive-spvs-36047198.html|archive-date=28 June 2018|url-status=live|df=dmy-all}}</ref> who are also the EU's leading securitisation hubs.  Particularly so, given the new anti-IP-based BEPS tool taxes of the U.S. [[Tax Cuts and Jobs Act of 2017]] (TCJA), (i.e. the new GILTI tax regime and BEAT tax regime), and proposed EU Digital Services Tax (DST) regimes.<ref name="carrot">{{cite web|url=https://taxfoundation.org/inversions-new-tax-law/|title=Inversions under the New Tax Law: Carrot and Stick|publisher=Tax Foundation|date=13 March 2018|access-date=13 May 2018|archive-url=https://web.archive.org/web/20190415120425/https://taxfoundation.org/inversions-new-tax-law/|archive-date=15 April 2019|url-status=dead|df=dmy-all}}</ref><ref name="Irish Times">{{cite news|url=https://www.irishtimes.com/business/donald-trump-singles-out-ireland-in-tax-speech-1.3310149?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Fdonald-trump-singles-out-ireland-in-tax-speech-1.3310149|title=Donald Trump singles out Ireland in tax speech|newspaper=The Irish Times|date=29 November 2017|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180403112427/https://www.irishtimes.com/business/donald-trump-singles-out-ireland-in-tax-speech-1.3310149?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Fdonald-trump-singles-out-ireland-in-tax-speech-1.3310149|archive-date=3 April 2018|url-status=live|df=dmy-all}}</ref><ref name="gnx2">{{cite news|url=https://www.irishtimes.com/business/economy/europe-points-finger-at-ireland-over-tax-avoidance-1.3417948|title=Europe points finger at Ireland over tax avoidance|newspaper=The Irish Times|date=7 March 2018|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180307095256/https://www.irishtimes.com/business/economy/europe-points-finger-at-ireland-over-tax-avoidance-1.3417948|archive-date=7 March 2018|url-status=live|df=dmy-all}}</ref>

The U.S. TCJA anticipates a return to debt-based BEPS tools, as it limits interest deductibility to 30% of EBITDA (moving to 30% of EBIT post 2021).<ref name="lexology">{{cite web|url=https://www.lexology.com/library/detail.aspx?g=04adc5c2-639a-45ce-8680-e080b5dacdbf|title=Tax Reform - Considerations for U.S. Multinationals|publisher=Lexology|date=9 March 2018|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180424202538/https://www.lexology.com/library/detail.aspx?g=04adc5c2-639a-45ce-8680-e080b5dacdbf|archive-date=24 April 2018|url-status=live|df=dmy-all}}</ref><ref>{{cite web|url=https://www.jpmorgan.com/jpmpdf/1320744529831.pdf|title=U.S. TCJA JPMorgan|publisher=JPMorgan|date=January 2018|access-date=2018-05-13|archive-url=https://web.archive.org/web/20180514064646/https://www.jpmorgan.com/jpmpdf/1320744529831.pdf|archive-date=2018-05-14|url-status=live}}</ref>

While [[securitisation]] SPVs are important new BEPS tools, and acceptable under global tax-treaties, they suffer from "substance" tests (i.e. challenges by tax authorities that the loans are artificial).  Irish Section 110 SPV's use of "[[Irish Section 110 Special Purpose Vehicle (SPV)#Features|Profit Participation Notes]]" (i.e. artificial internal intergroup loans), is an impediment to corporates using these structures versus established IP-based BEPS tools.<ref>{{cite web|url=http://www.arthurcox.com/wp-content/uploads/2012/06/Arthur-Cox-Establishing-SPVs-in-Ireland-for-Structured-Finance-Transactions-May-2014.pdf|title=Ireland as a Domicile for Structured Finance|publisher=Arthur Cox Law|date=2014|access-date=2018-05-13|archive-url=https://web.archive.org/web/20180316023100/http://www.arthurcox.com/wp-content/uploads/2012/06/Arthur-Cox-Establishing-SPVs-in-Ireland-for-Structured-Finance-Transactions-May-2014.pdf|archive-date=2018-03-16|url-status=dead}}</ref><ref>{{cite web|url=http://www.internationaltaxreview.com/Article/3439735/Irish-tax-regime-for-securitisation-vehicles.html|title=Irish Securitisation Section 110 Vehicles|publisher=International Tax Review|date=15 March 2015|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180612140504/http://www.internationaltaxreview.com/Article/3439735/Irish-tax-regime-for-securitisation-vehicles.html|archive-date=12 June 2018|url-status=live|df=dmy-all}}</ref>  Solutions such as the [[Irish Section 110 Special Purpose Vehicle (SPV)#Evolution|Orphaned Super-QIAIF]] have been created in the Irish tax code to resolve this.

However, while Debt-based BEPS tools may not feature with U.S. multinational technology companies, they have become attractive to global financial institutions (who do not need to meet the same "substance" tests on their financial transactions).<ref>{{cite news|url=https://www.independent.ie/business/irish/strong-evidence-ireland-aiding-eu-banks-taxavoidance-schemes-35569517.html|title='Strong evidence' Ireland aiding EU banks' tax-avoidance schemes|newspaper=Irish Independent|date=25 March 2017|access-date=19 May 2018|archive-url=https://web.archive.org/web/20180519205108/https://www.independent.ie/business/irish/strong-evidence-ireland-aiding-eu-banks-taxavoidance-schemes-35569517.html|archive-date=19 May 2018|url-status=live|df=dmy-all}}</ref><ref>{{cite news|url=https://www.irishtimes.com/business/financial-services/ireland-accused-of-facilitating-tax-avoidance-by-european-banks-1.3026167|title=Ireland accused of facilitating tax avoidance by European banks|newspaper=The Irish Times|date=17 March 2017|access-date=19 May 2018|archive-url=https://web.archive.org/web/20180705152320/https://www.irishtimes.com/business/financial-services/ireland-accused-of-facilitating-tax-avoidance-by-european-banks-1.3026167|archive-date=5 July 2018|url-status=live|df=dmy-all}}</ref>

In February 2018, the [[Central Bank of Ireland]] upgraded the little-used Irish [[Qualifying investor alternative investment fund (QIAIF)#L-QIAIF rationale|L-QIAIF]] regime to offer the same tax benefits as Section 110 SPVs but without the need for Profit Participation Notes and without the need to file public accounts with the Irish [[Companies Registration Office (Ireland)|CRO]] (which had exposed the scale of Irish domestic taxes Section 110 SPVs had been used to avoid, see [[Irish Section 110 Special Purpose Vehicle (SPV)#Abuses|abuses]]).