Facebook moving to Ireland and taking advantage of US - Ireland double tax treaty

Double tax treaties offer some tremendous opportunities for tax planning. In particular establishing treaty residence overseas can effectively completely eliminate most forms of UK corporation tax. For companies the standard double tax treaty decides the question of treaty residence by looking at which country the effective control is exercised from. If it is the UK, the company would be UK treaty resident. If it's controlled from overseas it could be classed as treaty resident overseas. Any company that is treaty resident overseas is classed as non UK resident for UK tax purposes. Under most treaties this means that the foreign country taxes the profits and it would just be the profits of any UK permanent establishment that is subject to UK tax. Facebook A number of multinational companies such as Google, Microsoft and Facebook, have taken advantage of the US-Ireland tax treaty, which enables companies to pay a rate of just 12.5% instead of the recently revised US tax rate of 40%. Facebook, which established its European base in Dublin, Ireland, now manages the majority of its online operations, sales and online advertising campaign delivery from this location. Dublin is also the centre for Facebook international operations, and provides a range of online technical, sales and operations support to Facebook customers across Europe, the Middle East and Africa. For more on tax planning with double tax treaties see our latest tax books: Tax Planning With Double Tax Treaties