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72:"Bermuda black hole" was used in relation to US corporate tax strategies that routed un-taxed profits to Bermuda, where they did not emerge again for fear of being subject to US corporation tax. Instead, the untaxed profits were "lent out" to the corporate parent, or its subsidiaries, thus avoiding the risk of incurring US taxation. The Bermuda black hole led to US corporations amassing over US$ 1 trillion in offshore locations from 2004 to 2017 (before the
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168:(TCJA) should diminish the ability of US corporations to use offshore structures that shield untaxed profits from US taxation, such as "Bermuda black hole" (or Bermuda Sinks), as global US corporate income is now deemed automatically repatriated to the US under the TCJA. It is therefore likely that the term "Bermuda black hole" will not remain in common use.
150:, used quantitative analysis techniques to prove that some global jurisdictions act like corporate taxation "black holes" (e.g. the Sink OFCs), where funds are sent as their legal "terminus". However, the study showed how the Sink OFCs rely heavily on jurisdictions that act as Conduit OFCs in routing untaxed global profits to the "black holes".
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on the classification of tax havens and offshore financial centres used the related term of "Sink offshore financial centre", instead of "black hole", to describe locations like
Bermuda as: "jurisdictions in which a disproportional amount of value disappears from the economic system". In the study
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In 2010 it was reported that Google uses techniques called the "Double Irish" and "Dutch
Sandwich" to reduce its corporate income tax to 2.4%, by funneling its corporate income through Ireland and from there to a shell in the Netherlands where it can be transferred to a "Bermuda Black Hole", which
90:(BEPS) corporate tax avoidance strategy as used by US multinational technology firms in Ireland; and particularly Apple and Google. Apple's "Bermuda black hole", called Apple Operations Ireland ("AOI"), became part of a 2013 US Senate inquiry by
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Labor
Senator Sam Dastyari said: "Any inquiry that results in people learning about a Double Irish Dutch sandwich and a Bermuda black hole is a good day for public policy. It's important to shine a light on the dark corners of corporate tax
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So, if you think about a lot of technology companies that are housed in
Ireland and have massive operations there, they're not going to maybe need those in the same way, and those can be relocated back to the
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A number of studies show that multinational corporations are moving "mobile" income out of the United States into low or no tax jurisdictions, including tax havens such as
Ireland, Bermuda, and the Cayman
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The term "black hole" is not unique to
Bermuda and has been used to describe other uses of offshore tax havens, such as the "Cayman black hole".
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54:. The term was most associated with US technology multinationals such as Apple and Google who used Bermuda as the "terminus" for their
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482:"COMMISSION DECISION of 30.8.2016 on STATE AID SA. 38373 (2014/C) (ex 2014/NN) (ex 2014/CP) implemented by Ireland to Apple"
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has no corporate income tax. The company also uses an avoidance structure in Asia called the "Singapore Sling".
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570:"Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network"
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Uncovering
Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network
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Garcia-Bernardo, Javier; Fichtner, Jan; Takes, Frank W.; Heemskerk, Eelke M. (24 July 2017).
548:"The Governance of the Black Holes of the World Economy: Shadow Banking and Offshore Finance"
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A "Bermuda black hole" became the most favoured common final destination for the
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and a US$ 13 billion fine, the largest corporate tax avoidance fine in history.
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Tax academics believe that the change in the US corporate tax code from the
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Double Irish arrangement § Effect of the Tax Cuts and Jobs Act (TCJA)
378:"'Double Irish' and 'Dutch Sandwich' saved Google $ 3.7bn in tax in 2016"
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464:"Offshore Profit Shifting and the U.S. Tax Code - Part 2 (Apple Inc.)"
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507:"How Apple Helped Create Ireland's Economies, Real and Fantastical"
360:"After a Tax Crackdown, Apple Found a New Shelter for Its Profits"
534:"RECOVERING ILLICIT ASSETS OFFSHORE: DEMYSTIFYING THE BLACK HOLE"
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410:"'Double Irish' limits Facebook's tax bill to €1.9m in Ireland"
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428:"Facebook paid just €30m tax in Ireland despite earning €12bn"
396:"Google's 'Dutch Sandwich' Shielded 16 Billion Euros From Tax"
342:"Apple's cash mountain, how it avoids tax, and the Irish link"
270:"The real story behind US companies' offshore cash reserves"
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Brussels. 30.8.2016 C(2016) 5605 final. Total Pages (130)
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Senator Carl Levin; Senator John McCain (21 May 2013).
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identified and classified in the study (see graphic).
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68:EU illegal State aid case against Apple in Ireland
46:schemes in which untaxed global profits end up in
130:ordered by value (highlighting U.K. dependencies)
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640:"Breaking Down the New U.S. Corporate Tax Law"
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139:Bermuda was ranked as the 5th largest of 24
446:The Tax Haven That's Saving Google Billions
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134:A seminal 2017 academic study published in
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285:"Offshoring Money: A Threat to Democracy"
239:"Apple, Google, Microsoft cop tax audit"
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56:Double Irish arrangement
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317:"Avoidance or evasion?"
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638:(26 December 2017).
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434:. 29 November 2017.
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491:. 30 August 2016.
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109:Replacement
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224:References
126:: List of
92:Carl Levin
66:See also:
62:Definition
38:refers to
208:Tax haven
154:2017 TCJA
141:Sink OFCs
128:Sink OFCs
52:tax haven
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518:13 April
469:Islands.
326:12 April
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48:Bermuda
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582:arXiv
485:(PDF)
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Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.
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