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Can I Order the Double Irish with a Dutch Sandwich, Please?

  • Several major companies avoid taxes through this entirely legal scheme
  • Ireland has made legislative changes to outlaw this practice

This appetizing dish—the Double Irish with a Dutch Sandwich—has piqued the tax-evading taste buds of several large corporations for years. First, get the ingredients: 2 Irish subsidiaries, 1 Dutch subsidiary, and a sprinkle of tax havens like The Bahamas, The Cayman Islands, or Bermuda (among several others). Cook for as many years as desired, parking funds in the tax haven. Yield: up to $1 trillion in cash.

The recipe for such a convoluted plan is pretty complex for even the most experienced tax chefs. Take Google, for example; the company profited from this practice for years before calling it quits by 2020. Per the plan’s namesake, the Double Irish involves a company, such as Google, with a subsidiary based in Ireland. Google’s oversea markets in Ireland, Netherlands, and elsewhere enjoy lower tax rates because of this system that cycles non-US profits through the international subsidiaries, eventually, parking assets in offshore tax havens.

Essentially, the Netherlands is sandwiched between two Irish subsidiaries—one located in Ireland, and an “Irish Holdings” located in a tax haven. Royalties gained outside the US flow between the “Double Irish” by the Dutch proxy (hence a “Dutch sandwich”). Of course, this is a brief overview of a much more complex scheme, but it stands to show the legality of the transaction.

In 2014, the strategy was brought under scrutiny, and in 2015, the Irish finance minister closed up the loopholes in Irish law that permitted such a manipulation of the system. Now, in 2020, all companies are no longer benefiting from the “Double Irish, Dutch Sandwich” system. This meal is off the menu!

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Devin McQuillan
Associate, Creative Solutions

516-541-6549 | Email

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