‘€88bn shifted through Ireland’ by US multinationals

US multinationals shifted $100bn (€88bn) in income to Ireland in a single year, in order to lower their tax bills, a new study shows.

The total amount of gross income posted by US firms and their subsidiaries in Ireland in 2012 was $122.3bn, according to the study commissioned by the Washington Center for Equitable Growth.

However, economics professor Kimberly A Clausing, an expert on multinationals and corporate tax, estimated just $23bn of that total would have been posted by the companies in Ireland if there had been no shifting of income to the Irish arms and subsidiaries.

“It is a much bigger issue than just inversions, that is just the tip of the iceberg,” she told The Washington Post.

Inversions occur when one company, often much larger, swallows up a smaller one in order to change their headquarters for tax purposes.

Companies based in Ireland have been popular targets for inversions, but the US has moved to close loopholes that allow it to happen.

Ms Clausing’s study describes Ireland as a tax haven with an effective corporate rate of less than 5%.

Separately, countries from Britain to Afghanistan pledged yesterday to set up public registers of company ownership in a collective effort to make it harder to launder the proceeds of corruption around the globe.

UK prime minister David Cameron announced the steps at a global anti-corruption summit he was hosting, but critics said the registers might have no meaningful impact unless tax havens, many ultimately controlled by Britain, also ended secrecy.