Editing Corporate haven (section)

===Reasons for the failure===
{{quote box
|width=19em|border=1px|align=right|bgcolor=#c6dbf7|qalign=left
|quote = Of the wider tax environment, O'Rourke thinks the OECD base-erosion and profit-shifting (BEPS) process is "very good" for Ireland.  "If BEPS sees itself to a conclusion, it will be good for Ireland."
|salign=left
|source=[[Feargal O'Rourke]] CEO PwC (Ireland).<br/>"Architect" of the famous [[Double Irish]] IP-based BEPS tool.<ref name="for0">{{cite news|url=https://www.bloomberg.com/news/articles/2013-10-28/man-making-ireland-tax-avoidance-hub-globally-proves-local-hero|title=Man Making Ireland Tax Avoidance Hub Proves Local Hero|newspaper=Bloomberg.com|publisher=Bloomberg News|date=28 October 2013|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180612234526/https://www.bloomberg.com/news/articles/2013-10-28/man-making-ireland-tax-avoidance-hub-globally-proves-local-hero|archive-date=12 June 2018|url-status=live|df=dmy-all}}</ref><ref name="for1">{{cite news|url=https://www.independent.ie/business/irish/controversial-tax-strategies-brainchild-of-orourkes-son-29721835.html|title=Controversial tax strategies brainchild of O'Rourke's son|newspaper=Irish Independent|date=3 November 2013|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180920120538/https://www.independent.ie/business/irish/controversial-tax-strategies-brainchild-of-orourkes-son-29721835.html|archive-date=20 September 2018|url-status=live|df=dmy-all}}</ref><br/>''The Irish Times'', May 2015.<ref name="fer">{{cite news|url=https://www.irishtimes.com/business/financial-services/scion-of-a-prominent-political-dynasty-who-gave-his-vote-to-accountancy-1.2203820?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Ffinancial-services%2Fscion-of-a-prominent-political-dynasty-who-gave-his-vote-to-accountancy-1.2203820|title=Scion of a prominent political dynasty who gave his vote to accountancy|newspaper=The Irish Times|date=8 May 2015|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180612152414/https://www.irishtimes.com/business/financial-services/scion-of-a-prominent-political-dynasty-who-gave-his-vote-to-accountancy-1.2203820?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Ffinancial-services%2Fscion-of-a-prominent-political-dynasty-who-gave-his-vote-to-accountancy-1.2203820|archive-date=12 June 2018|url-status=live|df=dmy-all}}</ref>
}}
The rise of modern corporate tax havens, like the United Kingdom, the Netherlands, Ireland and Singapore, contrasts with the failure of OECD initiatives to combat global corporate tax avoidance and BEPS activities.  There are many reasons advocated for the OECD's failure, the most common being:<ref name="un1">{{cite web|url=https://www.taxjustice.net/2017/09/11/new-un-tax-handbook-sets-lower-income-countries-oecd-beps/|title=New UN tax handbook: Lower-income countries vs OECD BEPS failure|publisher=Tax Justice Network|date=11 September 2017|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180529020446/https://www.taxjustice.net/2017/09/11/new-un-tax-handbook-sets-lower-income-countries-oecd-beps/|archive-date=29 May 2018|url-status=dead|df=dmy-all}}</ref>
[[File:Pierre Moscovici - P027634000101-313948.jpg|thumb|'''[[Pierre Moscovici]]''' EU Commissioner for Taxes, whose Digital Services Tax aims to force a minimum level of EU taxation on technology multinationals operating in the EU-28.]]
{{ordered list
| type = lower-roman|Slowness and predictability.  OECD works in 5-10 year cycles, giving havens time to plan new OECD-compliant BEPS tools (i.e. replacement of [[double Irish]]), and corporates the degree of near-term predictability that they need to manage their affairs and not panic (i.e. double Irish only closes in 2020).<ref>{{cite news| url=https://www.ft.com/content/ba95cff0-4fcd-11e4-a0a4-00144feab7de| title=Brussels in crackdown on 'double Irish' tax loophole| newspaper=Financial Times| date=October 2014| access-date=2018-05-13| archive-url=https://web.archive.org/web/20180722112759/https://www.ft.com/content/ba95cff0-4fcd-11e4-a0a4-00144feab7de| archive-date=2018-07-22| url-status=live}}</ref><ref name="guardian">{{cite news| url=https://theconversation.com/irelands-move-to-close-the-double-irish-tax-loophole-unlikely-to-bother-apple-google-33011| title=Ireland's move to close the 'double Irish' tax loophole unlikely to bother Apple, Google| newspaper=The Guardian| date=October 2014| access-date=2018-05-13| archive-url=https://web.archive.org/web/20180722114227/http://theconversation.com/irelands-move-to-close-the-double-irish-tax-loophole-unlikely-to-bother-apple-google-33011| archive-date=2018-07-22| url-status=live}}</ref><ref name="econ">{{cite news|url=https://www.economist.com/news/business/21672232-europes-corporate-tax-havens-say-they-are-reforming-up-point-still-slipping-net|title=Still slipping the net: Europe's corporate-tax havens say they are reforming. Up to a point|newspaper=The Economist|date=8 October 2015|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180514065615/https://www.economist.com/news/business/21672232-europes-corporate-tax-havens-say-they-are-reforming-up-point-still-slipping-net|archive-date=14 May 2018|url-status=live|df=dmy-all}}</ref>

{{quote|Figures released in April 2017 show that since 2015 [when the double Irish was closed to new schemes] there has been a dramatic increase in companies using Ireland as a low-tax or no-tax jurisdiction for intellectual property (IP) and the income accruing to it, via a nearly 1000% increase in the uptake of a tax break expanded between 2014 and 2017 [the [[double Irish arrangement#Backstop of capital allowances|capital allowances for intangible assets]] BEPS tool].|source=[[Christian Aid]], "Impossible Structures: tax structures overlooked in the 2015 spillover analysis", 2017<ref name="caid"/>}}|Bias to modern havens.  The OECD's June 2017 [[Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting|MLI]] was signed by 70 jurisdictions.<ref name="mli">{{cite web|url=https://www.squirepattonboggs.com/~/media/files/insights/publications/2017/07/turning-the-tide-oecds-multilateral-instrument-has-been-signed/27380--oecds-multilateral-instrument-has-been-signed-client-alert.pdf|title=Turning the Tide: The OECD's Multilateral Instrument Has Been Signed|publisher=SquirePattonBoggs|date=July 2017|access-date=2018-05-21|archive-url=https://web.archive.org/web/20180522041332/https://www.squirepattonboggs.com/~/media/files/insights/publications/2017/07/turning-the-tide-oecds-multilateral-instrument-has-been-signed/27380--oecds-multilateral-instrument-has-been-signed-client-alert.pdf|archive-date=2018-05-22|url-status=dead}}</ref>  The corporate tax havens opted out of the key articles (i.e. Article 12),<ref name="itm"/> while emphasising their endorsement of others (especially Article 5 which benefits corporate havens using the {{slink||Employment tax}} BEPS system).  Modern corporate tax havens like Ireland and Singapore used the OECD to diminish other corporate tax havens like Luxembourg and Hong Kong.<ref name="ey">{{cite web|url=http://www.ey.com/Publication/vwLUAssets/Signing_by_68_jurisdictions_of_the_Multilateral_Convention_to_Implement_Tax_Treaty_Related_Measures_to_Prevent_BEPS_highlights_impacts_for_business_to_consider/$FILE/2017G_03818-171Gbl_Signing%20by%2068%20jurisdictions%20of%20the%20MC%20to%20Implement%20Tax%20Treaty%20Related%20Measures%20to%20Prevent%20BEPS%20highlights.pdf|title=Signing by 68 jurisdictions of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS highlights impacts for business to consider|publisher=Ernst & Young|date=14 June 2017|access-date=19 May 2018|archive-url=https://web.archive.org/web/20180519204939/http://www.ey.com/Publication/vwLUAssets/Signing_by_68_jurisdictions_of_the_Multilateral_Convention_to_Implement_Tax_Treaty_Related_Measures_to_Prevent_BEPS_highlights_impacts_for_business_to_consider/$FILE/2017G_03818-171Gbl_Signing%20by%2068%20jurisdictions%20of%20the%20MC%20to%20Implement%20Tax%20Treaty%20Related%20Measures%20to%20Prevent%20BEPS%20highlights.pdf|archive-date=19 May 2018|url-status=dead|df=dmy-all}}</ref>

{{quote|The global legal firm [[Baker McKenzie]], representing a coalition of 24 multinational US software firms, including Microsoft, lobbied [[Michael Noonan (Fine Gael politician)|Michael Noonan]], as [Irish] minister for finance, to resist the [OECD MLI] proposals in January 2017.<br/>In a letter to him the group recommended Ireland not adopt article 12, as the changes "will have effects lasting decades" and could "hamper global investment and growth due to uncertainty around taxation". The letter said that "keeping the current standard will make Ireland a more attractive location for a regional headquarters by reducing the level of uncertainty in the tax relationship with Ireland's trading partners".|source=''[[The Irish Times]]''. "Ireland resists closing corporation tax 'loophole'", 10 November 2017.<ref name="itm">{{cite news|title=Ireland resists closing corporation tax 'loophole'|url=https://www.irishtimes.com/news/ireland/irish-news/ireland-resists-closing-corporation-tax-loophole-1.3286199|newspaper=The Irish Times|date=10 November 2017|access-date=19 May 2018|archive-url=https://web.archive.org/web/20181204122054/https://www.irishtimes.com/news/ireland/irish-news/ireland-resists-closing-corporation-tax-loophole-1.3286199|archive-date=4 December 2018|url-status=live|df=dmy-all}}</ref>}}|Focus on transparency and compliance vs. net tax paid.  Most of the OECD's work focuses on traditional tax havens where secrecy (and criminality) are issues.  The OECD defends modern corporate tax havens to confirm that they are "not tax havens" due to their OECD-compliance and  transparency.<ref name="ced"/><ref>{{cite web|url=https://www.oxfam.org.nz/news/oxfam-disputes-opaque-oecd-failing-just-one-tax-haven-transparency|title=Oxfam disputes opaque OECD failing that just one tax haven fails on transparency|publisher=Oxfam|date=30 June 2017|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180620124739/https://www.oxfam.org.nz/news/oxfam-disputes-opaque-oecd-failing-just-one-tax-haven-transparency|archive-date=20 June 2018|url-status=dead|df=dmy-all}}</ref><ref name="xyz">{{cite web|url=https://www.esr.ie/article/view/78/68|title=What Makes a Country a Tax Haven? An Assessment of International Standards Shows Why Ireland Is Not a Tax Haven|publisher=Irish Department of Finance and Revenue Commissioners|date=September 2013|access-date=2018-05-15|archive-url=https://web.archive.org/web/20180515184433/https://www.esr.ie/article/view/78/68|archive-date=2018-05-15|url-status=dead}}</ref>  The almost immediate failure of the 2017 German "Royalty Barrier" anti-IP legislation (see {{slink||German "Royalty Barrier" failure}}), is a notable example of this:

{{quote|However, given the nature of the Irish tax regime, the royalty barrier should not impact royalties paid to a principal licensor resident in Ireland.<br/>Ireland's [OECD] BEPS-compliant tax regime offers taxpayers a competitive and robust solution in the context of such unilateral initiatives.|source=[[Matheson (law firm)|Matheson]], "Germany: Breaking Down The German Royalty Barrier - A View From Ireland", 8 November 2017<ref name="math"/>}}|Defence of [[intellectual property]] as an intergroup charge.  The OECD spent decades developing IP as a legal and accounting concept.<ref name="lx">{{cite web | url=https://www2.deloitte.com/lu/en/pages/tax/articles/new_beps-compliant-ip-regime.html | title=New OECD BEPS-compliant IP regime open opportunities | publisher=Deloitte (Luxembourg) | date=August 2017 | access-date=2018-05-16 | archive-url=https://web.archive.org/web/20180516174245/https://www2.deloitte.com/lu/en/pages/tax/articles/new_beps-compliant-ip-regime.html | archive-date=2018-05-16 | url-status=dead }}</ref>  The rise in IP, and particularly intergroup IP charging,<ref name="conv"/> as the main BEPS tool is incompatible with this position.<ref name="raw"/>  Ireland has created the first OECD-nexus compliant "[[Corporation tax in the Republic of Ireland#Knowledge Development Box|knowledge box]]" (or KDB), which will be amended, as Ireland did with other OECD-whitelist structures (e.g. [[Irish Section 110 Special Purpose Vehicle (SPV)|Section 110 SPV]]), to become a BEPS tool.<ref name="oecdx">{{cite news|url=https://www.independent.ie/business/irish/oecd-gives-cautious-welcome-to-knowledge-box-tax-scheme-30685281.html|title=OECD gives cautious welcome to Irish Knowledge Box tax scheme|newspaper=Irish Independent|date=23 October 2014|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180513224146/https://www.independent.ie/business/irish/oecd-gives-cautious-welcome-to-knowledge-box-tax-scheme-30685281.html|archive-date=13 May 2018|url-status=live|df=dmy-all}}</ref>

{{quote|IP-related tax benefits are not about to disappear. In fact, [the OECD] BEPS [Project] will help to regularise some of them, albeit in diluted form. Perversely, this is encouraging countries that previously shunned them to give them a try.|source=''[[The Economist]]'', "Patently problematic", August 2015<ref name="lux">{{cite news|url=https://www.economist.com/business/2015/08/27/patently-problematic|title=Patently problematic|newspaper=The Economist|date=August 2015|access-date=2018-05-16|archive-url=https://web.archive.org/web/20180516174621/https://www.economist.com/business/2015/08/27/patently-problematic|archive-date=2018-05-16|url-status=live}}</ref>}}
}}

It has been noted in the OECD's defence, that G8 economies like the U.S. were strong supporters of the OECD's IP work, as they saw it as a tool for their domestic corporates (especially IP-heavy technology and life sciences firms), to charge-out US-based IP to international markets and thus, under U.S. bilateral tax treaties, remit untaxed profits back to the U.S.  However, when U.S. multinationals perfected these IP-based BEPS tools and worked out how to relocate them to zero-tax places such as the Caribbean or Ireland, the U.S. became less supportive (i.e. U.S. 2013 Senate investigation into Apple in Bermuda).<ref name="un1"/>

However, the U.S. lost further control when corporate havens such as Ireland, developed "closed-loop" IP-based BEPS systems, like the [[double Irish arrangement#Backstop of capital allowances|capital allowances for intangibles]] tool, which by-pass U.S. anti-Corporate [[tax inversion]] controls, to enable any U.S. firm (even IP-light firms) create a synthetic corporate tax inversion (and achieve 0-3% Irish [[Corporation tax in the Republic of Ireland#Effective tax rate (ETR)|effective tax rates]]), without ever leaving the U.S.<ref name="kpmg"/><ref name="acox"/><ref>{{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>  Apple's successful $300 Q1 2015 billion IP-based Irish tax inversion (which came to be known as [[leprechaun economics]]), compares with the blocked $160 billion Pfizer-Allergan Irish tax inversion.

[[File:Conversation with Margrethe Vestager, European Commissioner for Competition (17222242662).jpg|thumb|'''[[Margrethe Vestager]]''' EU Competition Commissioner, levied the largest corporate tax fine in history on Apple Inc. on the 29 August 2016, for €13 billion (plus interest) in Irish taxes avoided for the period 2004–2014.]]

The "closed-loop" element refers to the fact that the creation of the artificial internal [[intangible asset]] (which is critical to the [[BEPS]] tool), can be done within the confines of the Irish-office of a global accounting firm, and an Irish law firm, as well as the Irish [[Revenue Commissioners]].<ref>{{cite web|url=https://www.pwc.com/ca/en/services/tax/corporate-tax/transfer-pricing/base-erosion-profit-sharing-tax-diagnostic-toolkit.html|title=Base Erosion and Profit Shifting (BEPS) tax diagnostic toolkit|publisher=PriceWaterhouseCoopers|date=2016|access-date=2018-05-16|archive-url=https://web.archive.org/web/20180517005518/https://www.pwc.com/ca/en/services/tax/corporate-tax/transfer-pricing/base-erosion-profit-sharing-tax-diagnostic-toolkit.html|archive-date=2018-05-17|url-status=live}}</ref>  No outside consent is needed to execute the BEPS tool (and use via Ireland's global tax-treaties), save for two situations:
{{ordered list|type=lower-roman
| EU Commission State aid investigations, such as the [[EU illegal State aid case against Apple in Ireland]] for €13bn in Irish taxes avoided from 2004-2014;
| U.S. IRS investigation, such as Facebook's transfer of U.S. IP to Facebook Ireland, which was revalued much higher to create an IP BEPS tool.<ref>{{cite news|url=https://www.reuters.com/article/us-crypto-currencies-exchanges/crypto-trading-tumbles-as-investment-scramble-unwinds-idUSKBN1HR1PJ|title=Facebook must give judge documents for U.S. tax probe of Irish unit|work=Reuters|date=28 March 2018|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180502234122/https://www.reuters.com/article/us-crypto-currencies-exchanges/crypto-trading-tumbles-as-investment-scramble-unwinds-idUSKBN1HR1PJ|archive-date=2 May 2018|url-status=live|df=dmy-all}}</ref><ref>{{cite web|url=https://www.businesspost.ie/news/facebooks-dublin-hq-central-5bn-us-tax-probe-413079|title=Facebook's Dublin HQ central to $5bn US tax probe|publisher=Sunday Business Post|date=1 April 2018|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180421094412/https://www.businesspost.ie/news/facebooks-dublin-hq-central-5bn-us-tax-probe-413079|archive-date=21 April 2018|url-status=live|df=dmy-all}}</ref><ref>{{cite news|url=https://www.bloomberg.com/news/articles/2018-03-28/facebook-ordered-to-comply-with-u-s-tax-probe-of-irish-unit|title=Facebook Ordered to Comply With U.S. Tax Probe of Irish Unit|newspaper=Bloomberg.com|publisher=Bloomberg News|date=28 March 2018|access-date=13 May 2018|archive-url=https://web.archive.org/web/20180426013754/https://www.bloomberg.com/news/articles/2018-03-28/facebook-ordered-to-comply-with-u-s-tax-probe-of-irish-unit|archive-date=26 April 2018|url-status=live|df=dmy-all}}</ref> 
}}