BUSINESS
10/14/2014 10:41 am ET Updated Oct 14, 2014

Ireland Moves To Close Tax Loophole Favored By Apple

Bloomberg via Getty Images

The luck of the Irish is running out for Apple.

Ireland on Tuesday inched toward closing a major tax loophole, known as the "Double Irish," that allows large corporations like Apple, Google and LinkedIn to avoid paying taxes in the U.S., the Wall Street Journal reported.

Ireland's finance minister Michael Noonan announced the change Tuesday following a crackdown last month by the European Commission on deals between authorities in low-tax havens and large corporations.

“Aggressive tax planning by the multinational companies has been criticized by governments across the globe and has damaged the reputation of many countries,” Noonan said, according to the WSJ.

Apple pioneered a method of skirting taxes by funneling its money through small subsidiaries set up in states or countries with low tax rates. A 2012 report in the New York Times documented how an Apple office in Reno, Nevada saved it millions that it would have owed to California. Subsidiaries in Ireland, the Netherlands, Luxembourg and the British Virgin Islands, meanwhile, helped save the company billions of dollars.

The new rule, which will take effect in January, won’t affect companies currently employing the tax structure until 2020, the WSJ reported.

Apple did not immediately respond to a request for comment.

CONVERSATIONS