ACCORDING to the American Chamber of Commerce Ireland, nearly one thousand American companies currently operate in Ireland.
This could soon change, as there are growing calls from the Trump administration that such offshore activities be brought back home to the United States.
“They hold the intellectual property for many of our top tech and pharmaceutical firms,” said Commerce Secretary Howard Lutnick on the All-In podcast recently, “that’s something we need to put a stop to.”
Top corporations like Apple, Microsoft, and Pfizer are known to have shifted intellectual property to their Irish entities, drastically lowering their corporate tax bill.
This is not news to anyone in the EU; a 2014 investigation by the European Commission revealed that Apple’s effective corporate tax rate in Europe was under 1%.
“Take Apple, for example,” said Alexander Arnon, a senior policy analyst with the Penn Wharton Budget Model.
“With iPhone profits rolling in, the company can use strategic accounting to make a large portion of that income vanish from its U.S. tax bill.”
Ireland’s appeal to American companies dates to its economic struggles in the 80s and 90s.
High unemployment and a new wave of emigration prompted the government to adopt aggressive tax policies, which were aided by the country’s entry into the European Union.
“Ireland’s strategy was clearly designed to draw in foreign businesses,” said Kevin Kent, who chairs the transatlantic practice at law firm Clark Hill.
One of the most notable tax strategies used by multinationals was the “double Irish”, which exploited tax differences between jurisdictions by transferring intellectual property between subsidiaries.
“It acted as a release valve for companies in high-tax environments,” explained Adam Michel, a tax policy director at the Cato Institute.
“In a way, U.S. policies were incentivising businesses to relocate their headquarters and investments overseas.”
Ireland’s economy soared, with GDP per capita growth outpacing that of many other developed nations.
However, international pressure eventually led Ireland to overhaul its tax code between 2015 and 2020, effectively shutting down the “double Irish” loophole.
In 2024, the country's headline corporate tax rate rose to 15%.
Although, multinational firms still make use of other legal mechanisms, such as capital allowances for intangible assets, to lower their taxable income.
Despite the tighter tax environment, there hasn’t been a large-scale exodus from the Emerald Isle.
American companies still maintain a strong presence in Ireland, mainly due to its highly skilled English-speaking workforce and its strategic position within the EU.
However, with a new unpredictable hand at the helm in the White House, Ireland may need to prepare for rougher waters ahead.
