Question

1. Explain how Double Irish Sandwich scheme works to avoid paying tax by a MNC.

Answer 1

A majority of technology and life science multinational have been known to use double irish tax avoidance tool. This tool is used to reconstruct profit from high tax jurisdiction to tax havens. This scheme is used by many MNC to avoid tax. The double irish sandwich scheme involves sending profit from one irish company to a dutch company and finally to a second irish company. This technique made it possible to many companies to reduce their overall corporate tax rates.