A “Double Irish and a Dutch Sandwich” might seem like a food menu in a restaurant, but there isn’t any relationship to food. Instead, it is an economic term. This is a strategy for companies to pay lower taxes and increase their profits. Today, I’d like to talk about the “Double Irish and a Dutch Sandwich,” what this means, and whether it should be stopped.

 Double Irish with a Dutch Sandwich (Google as an example)

Double Irish with a Dutch Sandwich: the two are actually different but mostly the two tax-avoiding strategies are pronounced together. This strategy to avoid paying taxes is carried out by transferring profits to branches in tax havens. For instance, a traditional “Double Irish and Dutch Sandwich” strategy usually involves two branches located in tax havens. One might be in Ireland, and another in Bermuda or the Cayman Islands, etc. The one in Bermuda would be called the first Irish company and the one in Ireland the second. Some of the profit is transferred to the second one, and this entity pays royalties and tax; then, leaving part of the profit, the rest of the funds are sent back to the first Irish corporation, which pays its royalties and tax (the second Irish corporation is managed by the first one, which is the second Irish company’s legal HQ). After that, the first Irish corp in turn licenses a Dutch branch office, which pays royalties to the first Irish corp. The Dutch corp then sub-licenses the second Irish corp, which in turn pays royalties to the Dutch corp, then the second Irish corp sub-licenses other branches and is paid royalties by the other overseas branches. Then the company in the US or UK doesn’t pay much tax (despite paying sales tax, etc.) since it would be running deficits due to lack of profits, since most of the profits were transferred. “Double Irish” means the first and second Irish corp while the “Dutch Sandwich” means the Dutch company. This makes a sandwich: Bread 1=first Irish corp, meat=Dutch corp Bread 2=second Irish corp. This kind of strategy is used by many companies, but the tax haven is not always Bermuda or Ireland and the cheese or meat is not necessarily in the Netherlands.

소스 이미지 보기
Double Irish with a Dutch Sandwich (example)

This strategy is hated by most countries that aren’t tax havens, while it is loved by countries that are tax havens, since the development of branches in their countries also means an economic boost for them. This makes non-tax-haven countries want to ban the “Double Irish with a Dutch Sandwich”. However, they can’t due to the economic downfall that would happen when the companies move to tax havens. Therefore, this legal mechanism remains fact a “shield” for international companies to use Besides, companies such as Google, Apple, Starbucks, Facebook, Microsoft, and many others utilize tax havens.) They are all huge companies who lobby the government to keep allowing the tax havens. In my perspective, I believe this shouldn’t be banned. First, it is because of the “shield” the companies are gaining, there is hardly any way to eliminate this “shield’ and without these companies, information would be limited if we consider the fact that companies are gaining high amounts of info (Google and Microsoft) are using the “Double Irish with a Dutch Sandwich.” Without these companies, there is the possibility of many losing their jobs and an economic downfall to happen. Due to this, I believe this is a risk government and society should handle instead of many benefits, leading to the reason why I believe this shouldn’t be banned.

Recently, many are frustrated about the “Double Irish with a Dutch Sandwich”. However, before disliking it and global companies, people should know more about these strategies and make informed decisions on which side to take. All in all, this was what I believe about the “Double Irish with a Dutch Sandwich” and what this strategy is and its effects on our lives and our society.