All it takes is two Irish shells and one in the Netherlands: intellectual property and revenues can be offloaded to one of the Irish firms, bounced through the Netherlands, and then thrown to the second Irish firm (technically headquartered in the Cayman Islands or Bermuda, where tax is infinitesimal). The sandwich is a classic play, the shotgun formation of money-shirking. Sparrow II, and Twitter Netherlands B.V.-the ingredients you need to make a "Double Irish With a Dutch Sandwich," which is an actual term that actual tax attorneys use to describe a convoluted tax-avoidance scheme. Three other subsidiaries disclosed alongside Twitter's S-1 make the maneuvering more clear: T.I. Matheson is in the business of obfuscation, the creation of elaborate-and legal-money mazes. Diagrams like this one demonstrate how a shell game of holding companies and trusts lets a company like Twitter conduct business far, far away from Silicon Valley, while avoiding taxes: Twitter International's "secretary," for example, is a corporate trust called "Matsack," a subsidiary of Matheson that also serves as secretary for over one thousand other companies.Ī presentation prepared by Matheson, and obtained by Valleywag, touts Ireland's "favourable tax regime" as first among the country's perks for American corporations-the "flexible business and company law regime" is number two on the list. in Dublin are registered, for tax purposes, to a "Twitter International Company," the directors of which are either in distant California, or are Irish attorneys at Matheson Ormby Prentice, a firm that offers specialized tax-lowering service for American companies. But a look at the documents which gave birth to Twitter in Ireland show other motives for the move there, of all places in the world. The company employs 100 Dubliners, and is looking to expand.
Twitter appears to be the latest high profile tax tourist in the Emerald Isle. Ireland doesn't scream disruption, but it's made a name for itself as a Yankee corporate haven. Taxes aren't really supposed to work this way, but they can, and so any company with the means- including Gawker Media-will pay the bare minimum, no matter how much navigating it takes.
are higher than they are elsewhere in the world, so large, clever firms will exercise every legal trick at their disposal to skirt these taxes and pay a much, much lower rate in Ireland. It's simple corporate "rationality"-taxes in the U.S. But there's good news! Twitter is already pulling an Apple and setting itself up with Irish money loopholes.Īpple has saved over $74 billion dollars in American corporate taxes since it started moving assets to Irish shell corporations that consist of little more than an address and paperwork a few decades ago. If Twitter's transformation from "that micro-blogging service" to publicly traded advertising titan works out, it's going to have a painful tax bill.
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