Feargal O'Rourke facts for kids
Quick facts for kids
Feargal O'Rourke
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Former Taoiseach Enda Kenny (left) and O'Rourke in 2014
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| Born | 3 August 1964 |
| Nationality | Irish |
| Education | Marist College, Athlone |
| Alma mater | University College Dublin |
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| Known for | Double Irish tax scheme |
| Title | Managing partner, Ireland (July 2015) |
| Spouse(s) | Maeve O'Rourke |
| Children | 2 |
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Feargal O'Rourke (born 3 August 1964) is an Irish accountant and expert in company taxes. He used to be the managing partner of PwC in Ireland. Many people see him as the creator of the Double Irish tax plan. This plan was used by big American companies like Apple, Google, and Facebook in Ireland. He was also a key person in creating tax plans and laws for these large international companies in Ireland.
Contents
Feargal O'Rourke's Family and Early Life
Feargal O'Rourke comes from a well-known political family in Ireland. His family has strong ties to the Fianna Fáil political party.
His mother, Mary O'Rourke, was a government minister in Ireland. His uncle, Brian Lenihan Snr, was a former Tánaiste (Deputy Prime Minister). His cousins, Brian Lenihan Jnr and Conor Lenihan, also served as government ministers.
When he was in college at University College Dublin (UCD), he led the Fianna Fáil student group. After graduating, he joined the national executive committee of the party.
Understanding the Double Irish Tax Plan
Feargal O'Rourke was once called the "great architect" of the Double Irish tax plan. This plan was a way for large companies to reduce the amount of tax they paid. Companies like Google, Facebook, and Apple used it in Ireland.
The plan helped companies move their profits to countries where they would pay less tax. This is sometimes called "base erosion and profit shifting" (BEPS).
In 2018, a journalist named Richard Brooks wrote about O'Rourke's work with Google. He explained how O'Rourke helped change tax rules in Ireland. This made it easier for companies to avoid paying taxes on royalties.
The European Union (EU) later fined Apple €13 billion. This was because Apple's Double Irish plan helped it avoid Irish taxes from 2004 to 2014. This was the largest company tax fine ever. O'Rourke's company, PwC Ireland, actually helped the Irish government defend its tax rules during the EU's investigation into Apple.
O'Rourke does not agree with being called the "architect" of the scheme. However, he believes that Ireland should be able to use legal ways to benefit from tax rules in other countries, like the US.
Feargal O'Rourke: "Why should Ireland be the policeman for the US?" he asks. "They can change the law like that!" He snaps his fingers. "I could draft a bill for them in an hour." "Under no circumstances is Ireland a tax haven. I'm a player in this game and we play by the rules."
Other experts in Ireland had different opinions. Jim Stewart, a professor at Trinity College's business school, said:
O'Rourke and other accountants like him "think up these tax strategies and the impact is tens of billions in lost tax revenue in Europe, the US and less-developed countries", says Jim Stewart, associate professor of finance at Trinity College's school of business. "He's a very aggressive leader of the tax-avoidance industry here."
In October 2013, O'Rourke predicted that the Double Irish plan would end. It was indeed closed to new companies in January 2015. However, new tax plans took its place. These included the Single Malt scheme and the Capital Allowances for Intangible Assets ("CAIA") scheme. Apple used the CAIA scheme in 2015.
O'Rourke's work on the 2009 Commission on Taxation helped create the CAIA plan. This plan allowed companies to reduce their taxes by claiming costs for things like patents or trademarks.
Understanding Effective Tax Rates
In January 2014, Feargal O'Rourke publicly defended Ireland's tax plans. This happened when a US government agency showed that Ireland's "effective tax rate" (ETR) for companies was very low, between 2.2% and 3.8%. The ETR is the actual percentage of profit a company pays in taxes. This caused international debate about Ireland being a "tax haven."
O'Rourke argued that Ireland's ETR was actually close to its official company tax rate of 12.5%. He used a survey by the World Bank and PwC to support his point. In a radio interview in February 2014, he said there was a "hole the size of the Grand Canyon" in the US agency's analysis.
The difference comes from how Ireland's tax system works compared to its official tax rate. The EU Commission's 2016 findings against Apple showed this clearly. The Irish tax office believed Apple was paying the full 12.5% tax rate on its profits in Ireland. However, the EU Commission found something different:
Selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014.
Experts point out that Ireland's overall company tax system and O'Rourke's tax plans were very powerful. This was more important than the official 12.5% tax rate.
Applying a 12.5% rate in a tax code that shields most profits from taxation, is indistinguishable from applying a near 0% rate in a normal tax code.
Feargal O'Rourke's Impact and Legacy
The very low effective tax rates (0–2.5%) that resulted from O'Rourke's tax plans have been criticized internationally. Academic studies have shown that Ireland is a major tax haven. In June 2018, tax experts even said Ireland was the biggest global tax haven. They found it helped US companies avoid over $100 billion in taxes each year in Ireland and the US.
O'Rourke's defense of Ireland's low tax rates for US companies is part of Ireland's "green jersey agenda". This means putting Ireland's economic interests first, even if it affects its reputation. This is a common approach in Irish politics.
Despite the tax money lost by other countries, O'Rourke's tax plans have brought wealth to Ireland. Many of Ireland's top companies are US-controlled international businesses. These companies employ a quarter of Ireland's private workforce. They also pay 80% of Ireland's business taxes. They create a large part of Ireland's economic value. However, O'Rourke's tax plans have been less successful at attracting non-US companies to Ireland.
In October 2013, Bloomberg noted that O'Rourke is seen as a "hero" in Ireland. He is often asked to share his views on the Irish economy and tax policy. O'Rourke has been part of several important Irish government groups that review taxation. This includes the major Commission on Taxation in 2009.
In February 2014, The Irish Times newspaper included him in its list of the 50 most influential people in Ireland. O'Rourke is also on the Board of the American Chamber of Commerce Ireland. This group represents US companies in Ireland. In March 2018, he said that new US tax laws would challenge Ireland's economy. However, he believed Ireland could handle it. In April 2018, he suggested that the Irish government should build a "rainy day fund" for future challenges. O'Rourke also uses Twitter actively.
See also
- EU illegal state aid case against Apple in Ireland
