“And under Irish tax law, the second Irish resident subsidiary is not taxed on the royalty payment because it is controlled by managers elsewhere.”
http://www.theregister.co.uk/2012/11/22/how_vendors_avoid_ta...
Google (as a verb, no pun intended) for “Double Irish” and “Dutch Sandwich” if you want the full picture of the scheme.
http://www.theguardian.com/business/ireland-business-blog-wi...
And not just Google I believe Apple laundered north of 50 billion and only have a handful of employees here http://www.nytimes.com/2012/04/29/business/apples-tax-strate...
As a small business owner it sickens me with how these large companies can get away with so much here, ok granted they are creating jobs (badly needed) and have other positive effects on a sinking economy but having Revenue put a blind eye on these shenanigans while making life miserable for small companies is unfair.
It is also misleading and annoys customers when you show prices exVAT, it is you who gets blamed for this tax not the government or EU
Most of the competition who are outside of the EU dont have to worry about this VAT shit and can have lower prices hence shown to endusers
Not only thats almost a quarter of your price gone in sales tax but, there is a quite abit of added work in remaining tax compliant
Of course if you are Google etc of this island you can just launder your money onto Bahamas or somewhere else warmer and barely pay any taxes