Global tax deal leaves billion-dollar loopholes, Reuters analysis finds

DUBLIN, Dec 3 (Reuters) - Leaders of the world’s largest economies hailed a recent agreement to overhaul global corporate tax rules as key ensuring multinationals paid their fair share of tax.

The October deal established a global minimum corporate tax rate of 15% aimed at curtailing profit-shifting to lower-tax jurisdictions such as Ireland, where many large international firms have their European headquarters. “It will eliminate incentives to shift jobs and profits abroad,” U.S. President Joe Biden in early October.

But some companies could still use Ireland to reduce their tax bills even after the agreement takes effect, according to tax specialists and a Reuters review of corporate filings.

That’s because the new agreement won’t stop companies benefiting from a strategy widely implemented in recent years that reduces taxes over a period of up to a decade or more. Ireland’s relatively generous tax allowances permit multinationals with a presence in the country to sell intellectual property, such as patents and brands, from one subsidiary to another to generate deductions that can be used to shield future profits from tax.