Ireland was recently stunned with the news that Apple owed it 13
billion euros it did not want. The underlying tax arrangement was
relatively straightforward: Corporations that do businesses in
different jurisdictions often configure their internal operations
to reduce their tax obligations. The process ensures they are
compliant with the tax law of every country they operate in, while
still limiting their taxes.
This procedure is neither novel nor illegal. It is common enough
to have a descriptor: "tax arbitrage." The objective is
recognized in Anglo-American jurisprudence. In 1929, the House of
Lords held that "[n]o man in this country is
under the smallest obligation, moral or other, so to arrange his
legal relations to his business or to his property as to enable the
Inland Revenue to put the largest possible shovel into his
stores." Five years later, Judge Learned Hand wrote "Any one may so arrange his affairs
that his taxes shall be as low as possible; he is not
