The Double Irish and Dutch Sandwich Scheme

Law Apr 3, 2020

While undergoing my undergraduate degree in law, I had already decided to pursue my thesis on Tax Avoidance since it is a legal way albeit immoral one to curtail the amount of tax an institution has to pay. And it was during that time, big multinational corporates were being busted for avoiding tax by using a novel scheme, "The Double Irish and Dutch Sandwich". A funny name, though it spells out clearly how the scheme works. One just has to route one's money through two irish companies and a dutch one. My thesis mainly explored how Apple Inc. was avoiding tax.

Companies  using  this scheme enable the transfer of a large amount of their profits to offshore tax havens by using wholly owned subsidiaries located in Ireland  and  the  Netherlands.  This  paper  also  analyzes  the  United States General Anti-Avoidance Rule to see whether it can effectively detect  and  counteract  this  scheme.  This  analysis  is  furthermore enhanced by applying the Mauritian General Anti-Avoidance Rule through Section 90 of the Income Tax Act to the said scheme. The paper  then  concludes  that  it  is  possible  to  counteract  the  scheme using the Mauritian law but under specific circumstances. It is then revealed that there is a fundamental flaw in the current tax systems, which is the inability to regulate the intangible nature of resources, and technology based transactions.

If my brief summary above captivated you enough, check out my thesis below.


Aditya Bholah

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