Turns out Twitter’s been using Ireland to avoid tax too

In the run up to Twitter’s IPO, it’s become increasingly evident that the social network is trying to maximise its revenue stream and become profitable. One way of doing so is to minimise the amount of tax it has to pay. And in this, it’s decided to go down the path tread by the likes of Google and Apple by using Irish loopholes.

Both Apple and Google have offices in Ireland, with the latter using its presence there as part of a web of offshore bank accounts and transactions spanning across multiple other countries including Bermuda and the Netherlands that allowed the tech giant to pay just £6-million in taxes on £2.5-billion worth of sales in the UK.

Other companies make use of Ireland’s business friendly tax rates by setting up shell corporations, which are often little more than an address and a few pieces of paperwork.

That’s not really Twitter’s modus operandi — it actually has legitimate offices in Dublin which employ over 100 people — but it does looks like parts of Irish presence at least are designed to help the company avoid paying US corporate taxes.

According to documents obtained by Valleywag, Twitter’s Dublin address is listed as belonging to a “Twitter International Company”. The directors of this company, the publication notes, are either listed as being in California or working for Matheson Ormby Prentice, a law firm that specialises in tax practices for overseas companies.

A presentation by the firm lists Ireland’s “favourable tax regime” and “flexible business and company law regime” as sound reasons for setting up shop in the country.

Twitter’s SEC-filing meanwhile lists three subsidiaries companies: T.I. Sparrow I, T.I. Sparrow II, and Twitter Netherlands B.V.

Together they make up the ingredients for the Double Irish with a Dutch Sandwich tax avoidance recipe.

This kind of behaviour, while incredibly rational from a purely corporate point of view (what mega-corporation isn’t going to try avoid paying taxes?) has been widely condemned by political leaders around the globe, with UK Prime Minister David Cameron calling it “aggressive” and “corrosive to the public trust”.

Ireland meanwhile is re-examining its tax practices, including ones which allow companies to be “stateless” for tax purposes. While its business friendly policies have helped the country attract substantial investment from multi-nationals, its inability to collect tax from them means that it’s been particularly hard hit by the austerity measures implemented in the wake of the Eurozone debt crisis.