Professor Jim Stewart:

It is the rule in Ireland. Where a company is incorporated is where it pays its tax, except in the case of foreign owned companies. For a domestic Irish company there is no ambiguity. If a company is incorporated here and owned here then it pays tax here. It is only if one is owned by another company, outside of Ireland, that an ambiguity arises and then all these rules come into play. For example, one must ask where is central management and control or where is the permanent establishment located. Unfortunately, as we know, and as Revenue guidelines state, where central management and control arises can be very ambiguous. It is not particularly where one has board meetings because they can be conducted by telephone. One could attend a meeting by using the telephone. The question is where is one located for that purpose.

There are all these complicated rules about a permanent establishment which amounts to about 80 pages but in the tax treaty it is about 25 words. However, in the definition of permanent establishment there are about 80 pages of complex rules. Some of them are complicated and so much so that I will give the following example. If one's name, literally, is on a shoebox for six months then one can be located there for tax purposes.