Ireland reportedly considering corporate tax reforms

Ireland is reportedly considering tax reforms that would close a loophole allegedly exploited by several multinational corporations -- most notably Apple -- to reduce their tax bills.

In the face of mounting international criticism, the Irish government is considering ways to phase out the Double Irish taxation arrangement, according to a report this weekend in the financial newspaper Sunday Business Post. The technique dramatically reduces a company's tax debt by funneling profits through two linked Irish subsidiaries.

The report did not indicate what specific changes might be under consideration. 

The Senate report noted that Apple's Irish subsidiary earned $22 billion in 2011. However, it wound up paying $10 million in taxes.The technique has led to criticism by U.S. lawmakers who recently labeled Ireland a tax haven for U.S. companies seeking to avoid taxes in their home country. A recent report prepared by the Senate Permanent Subcommittee on Investigations described how Apple has used corporate structures set up in myriad countries that allow it to exist as a resident of nowhere so that it pays very little corporate tax on its international revenue.

"Apple's three primary Irish entities hold 60 percent of the company's profits but claim to be tax residents nowhere in the world," Arizona Sen. John McCain said, adding that it was "completely outrageous" that Apple has managed to avoid paying taxes at home and abroad.

Apple is just one of several companies being investigated by the subcommittee. Last September, the group spoke with Microsoft and Hewlett-Packard.