Some of you here may have heard of and understand this, but I just read about it for the first time and it alarmed me how blatantly dishonest this
method is. Just another example of how the playing field is not level.
This is all from wiki but the sources they use appear to be legit.
The Double Irish Arrangement is a tax avoidance strategy that U.S. based multinational corporations use to lower their income tax liability. The idea
is to use payments between related entities in a corporate structure to shift income from a higher-tax country to a lower-tax country. It relies on
the fact that Irish tax law does not include U.S. transfer pricing rules.
You can read the full wiki article here
Typically, the company arranges for the rights to exploit intellectual property outside the United States to be owned by an offshore company. This is
achieved by entering into a cost sharing agreement between the U.S. parent and the offshore company, in the terms of U.S. transfer pricing rules. The
offshore company continues to receive all of the profits from exploitation of the rights outside the U.S., without paying U.S. tax on the profits
unless and until they are remitted to the U.S. It is called "The Double Irish" because it requires two Irish companies to complete the structure.
The first Irish company is the offshore company which owns the valuable non-U.S. rights. This company is tax resident in a tax haven, such as Bermuda
or the Cayman Islands. Irish tax law provides that a company is tax resident where its central management and control is located, not where it is
incorporated, so that it is possible for the first Irish company not to be tax resident in Ireland. The first Irish company licenses the rights to a
second Irish company, which is tax resident in Ireland, in return for substantial royalties or other fees. The second Irish company receives income
from exploitation of the asset in countries outside the U.S., but its taxable profits are low because the royalties or fees paid to the first Irish
company are deductible expenses. The remaining profits are taxed at the Irish rate of 12.5%. For companies whose ultimate ownership is located in the
United States, the payments between the two related Irish companies might be non-tax-deferrable and subject to current taxation as Subpart F income
under the Internal Revenue Service's Controlled Foreign Corporation regulations if the structure is not set up properly. This is avoided by organizing
the second Irish company as a fully owned subsidiary of the first Irish company resident in the tax haven, and then making an entity classification
election for the second Irish company to be disregarded as a separate entity from its owner, the first Irish company. The payments between the two
Irish companies are then ignored for U.S. tax purposes. 
The real kicker is the list of corporations known to use this method...
Major companies known to employ the Double Irish strategy are:
Eli Lilly and Company
No surprises here.
edit on 19-11-2011 by CREAM because: (no reason given)
edit- Too bad the good information doesn't interest people as much as pedophiles, war, or smearing something or the other lol...
19-11-2011 by CREAM because: (no reason given)