By Sam Obenhaus
While
the United States has one of the highest corporate tax rates in the developed
world, it is often pointed out that the effective tax rate – what corporations
actually pay – is significantly lower than the official rate. For a
number of tech companies, this is largely due to one man: Feargal O’Rourke, the
head of PricewaterhouseCoopers’ tax practice in Ireland.
Ireland,
of course, is at the center of many tech companies tax strategies.
O’Rorke is a chief architect of many of these plans, including those used by
Google, LinkedIn, and Facebook. Each of those companies funnels its
profits through Ireland on their way to other tax havens, such as Grand Cayman
and the Isle of Man. These strategies are estimated to cost the U.S. federal government and its European counterparts an estimated $100 billion per
year in lost revenue.
With
austerity gripping much of Europe and sequestration in the
United States, Ireland has found itself in the middle of a controversy. Governments
need more revenue, and some U.S. lawmakers have started calling Ireland a tax
haven. But O’Rourke – perhaps Ireland’s biggest defender – is
undeterred.
He
points out that Ireland’s tax strategies have led many multinational
corporations to set up offices in Ireland. These operations are estimated
to employee approximately 100,000 people. Further, he notes that the United States and other countries could tip the balance overnight by simply changing their
own tax laws. What O’Rourke may be less willing to discuss is his role in
shaping Ireland’s tax policies.
Bloomberg
has more on O’Rourke, while Reuters
reports on Ireland’s recent moves to shed its image as a tax haven.
