Irish move to save Twitter 53 per cent in tax
Contrary to reports earlier today, Twitter actually stands to pocket in excess of 50 per cent more in profits by basing its European headquarters in Dublin instead of London.
The social networking giant has announced plans to locate an international office in Ireland, where it joins the likes of Facebook, Google, LinkedIn, eBay, PayPal, Microsoft and Meade Potato Company.
TechCrunch Europe reported this morning that Twitter stood to gain 16 per cent in tax by basing itself in Dublin as opposed to London.
This calculation was based on the respective rates of corporation tax: our 12 per cent as opposed to the 28 per cent rate which reportedly prevailed in the UK.
However, a few seconds spent on a calculator leads us to believe that the rate of saving is actually more than 50 per cent.
For example, for every €1m in taxable profits of Twitter in Ireland, the company would pay a nominal €120,000 in corporation tax as opposed to €260,000 under London rates (the UK Government dropped its corporate tax from 28 to 26 per cent last April).
That, in effect, represents a saving of €140,000 – or 53 per cent – from situating its European office in Dublin rather than London.
In actual fact, though, Twitter will probably save much more than that, if they're clever enough to deploy tactics which exploit tax loopholes all over the globe.
It was revealed last year that accounting practices known as a Double Irish and a Dutch Sandwich - owing to similarly favourable tax conditions in the Netherlands - helped Google to reduce its tax bill by €2.2bn.
The 12 per cent Irish corporation tax rate which has contributed to the relocation of so many big companies to these shores has raised the heckles of the likes of France and Germany, who are adamant that Ireland should agree to a more uniform Europe-wide tax rate as a payback for the bailout provided by the financial terrorists good folk at the EU, ECB and IMF.