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Financial flows and treasury management firms in Ireland

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  • Stewart, Jim

Abstract

The use of tax havens is a pervasive part of modern economic activity. Treasury management subsidiaries who are key conduits in the global intra-firm movement of funds are often located in tax havens or in countries with tax haven type features. This paper shows how two recent European Court of Justice cases dealing with treasury management firms located in Ireland, have helped secure the legal and tax benefits of such operations. The paper examines financial flows and other financial characteristics of 46 treasury management firms based in Ireland for the period 1998–05. While financial flows are large, they are highly variable from period to period. These firms are highly profitable, but median employment is zero. The paper concludes that while recent court cases have supported the existence of both low tax regimes and treasury management type operations within the EU, their continued existence is opposed by many EU and non EU countries as being at variance with legislation to counteract tax avoidance.

Suggested Citation

  • Stewart, Jim, 2008. "Financial flows and treasury management firms in Ireland," Accounting forum, Elsevier, vol. 32(3), pages 199-212.
    • Handle: RePEc:eee:accfor:v:32:y:2008:i:3:p:199-212
    DOI: 10.1016/j.accfor.2008.03.001
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    References listed on IDEAS

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    1. Palan, Ronen, 2002. "Tax Havens and the Commercialization of State Sovereignty," International Organization, Cambridge University Press, vol. 56(1), pages 151-176, January.
    2. Jim Stewart, 2005. "Fiscal incentives, corporate structure and financial aspects of treasury management operations," Accounting Forum, Taylor & Francis Journals, vol. 29(3), pages 271-288, September.
    3. Desai, Mihir A. & Foley, C. Fritz & Hines, James Jr., 2006. "Do tax havens divert economic activity?," Economics Letters, Elsevier, vol. 90(2), pages 219-224, February.
    4. James R. Hines & Eric M. Rice, 1994. "Fiscal Paradise: Foreign Tax Havens and American Business," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(1), pages 149-182.
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    Cited by:

    1. Ronen Palan & Hannah Petersen & Richard Phillips, 2023. "Arbitrage spaces in the offshore world: Layering, ‘fuses’ and partitioning of the legal structure of modern firms," Environment and Planning A, , vol. 55(4), pages 1041-1061, June.
    2. Sikka, Prem, 2013. "Smoke and mirrors: Corporate social responsibility and tax avoidance—A reply to Hasseldine and Morris," Accounting forum, Elsevier, vol. 37(1), pages 15-28.
    3. Paul Sweeney, 2010. "Ireland’s low corporation tax: the case for tax coordination in the Union," Transfer: European Review of Labour and Research, , vol. 16(1), pages 55-69, February.

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