mediajunk

They say you learn something new every day. Today I learned a phrase that made me smile -- "tax avoison". Now, if I could only learn how to practice tax avoison, that would make me smile even wider.

I heard the phrase mentioned in a radio discussion about Ireland's growing reputation as a -- sort of, almost, not quite, kinda -- tax haven. The discussion was spurred by the recent move of UK Drugs company Shire to Ireland, for tax reasons. (Source:The Times, UK)

Now, companies re-locating to, or locating branches in Ireland for tax reasons is nothing new. Large software firms, in particular, have been doing it for years. The nature of the software business -- much of it globalised and online -- allows these companies to "wash" certain profits through their Irish branch, and avail of Ireland's lower corporation taxes on these profits, and makes it difficult for anyone else (e.g. the US taxman) to disprove that the profits emerged elsewhere.

What's new about Shire story is that this the first FTSE 100 company to relocate to Ireland. And, as the UK tightens its tax laws, Ireland is being seen as a UK companies as, if not a tax haven outright, a safer haven than the UK.

Expect many more UK companies to follow suit over the coming months and years...