Ireland has closed a loophole that multinationals used to save billions of dollars. As Ciara Lee reports Finance Minister Michael Noonan told Reuters it was becoming a ''slur'' threatening a low-tax regime that has created tens of thousands of jobs.
The loophole - closed for business. Ireland is changing tax rules that have helped multinational companies save billions of dollars. Finance Minister Michael Noonan says the country no longer wants to be associated with the system. (SOUNDBITE) (English) IRISH FINANCE MINISTER, MICHAEL NOONAN, SAYING: "This is the kind of uncertainty I want to remove. I want to make sure that in so far as Ireland is concerned, the slur of the double Irish is no longer attached to Ireland's reputation." "Double Irish" - as the tax structure is known - allows a multinational to channel untaxed revenues to an Irish subsidiary. It then pays the money to another company that's registered in Ireland but pays its taxes elsewhere - usually somewhere like Bermuda. Dublin has been criticised by the EU and the U.S. over the structure which is used by firms such as Google and Apple. So from January, new Irish-registered firms will be automatically deemed a tax-resident, bringing Ireland in line with Britain and the U.S. Companies already incorporated have until 2020 to comply. Google's Executive Chairman Eric Schmidt. (SOUNDBITE) (English) GOOGLE EXECUTIVE CHAIRMAN, ERIC SCHMIDT, SAYING: "We operate under the same tax regime that the German companies do working in the United States. And we use the 'Ireland path' which many American companies do. Dublin announced on Tuesday that they're changing that, and we welcome those changes and will fully comply." The move was announced during the country's budget - the first in seven years not to include new austerity measures. But not everyone is in favour. Many believe the low-tax regime created tens of thousands of jobs and helped Ireland get back on its feet after its bailout four years ago. Dublin though insists the changes will lead to more employment as they include a new property tax regime. And by taking the bull by the horns, it also hopes to avoid problems in the future. New international tax rules are being introduced next year.