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Concept
Modified gross national income
Summary
Modified gross national income, Modified GNI or GNI* was created by the Central Bank of Ireland in February 2017 as a new way to measure the Irish economy, and Irish indebtedness, due to the increasing distortion that the base erosion and profit shifting ("BEPS") tools of US multinational tax schemes were having on Irish GNP and Irish GDP; the climax being the July 2016 leprechaun economics affair with Apple Inc.
While "Inflated GDP-per-capita" due to BEPS tools is a feature of tax havens, Ireland was the first to adjust its GDP metrics. Economists, including Eurostat, noted Irish Modified GNI (GNI*) is still distorted by Irish BEPS tools and US multinational tax planning activities in Ireland (e.g. contract manufacturing); and that Irish BEPS tools distort aggregate EU-28 data, and the EU-US trade deficit.
In August 2018, the Central Statistics Office (Ireland) (CSO) restated table of Irish GDP versus Modified GNI (2009–2017) showed GDP was 162% of GNI* (EU-28 2017 GDP was 100% of GNI). Ireland's public differ dramatically depending on whether Debt-to-GDP, Debt-to-GNI* or Debt-per-Capita is used.
Double Irish arrangement
In February 1994, tax academic James R. Hines Jr., identified Ireland as one of seven major tax havens in his 1994 Hines-Rice paper, still the most cited paper in research on tax havens. Hines noted that the profit shifting tools of US multinationals in corporate-focused tax havens distorted the national economic statistics of the haven as the scale of the profit shifting was disproportionate to haven's economy. An elevated GDP-per-capita became a "proxy indicator" of a tax haven.
In November 2005, the Wall Street Journal reported that US technology and life sciences multinationals (e.g. Microsoft), were using an Irish base erosion and profit shifting ("BEPS") tool called the double Irish, to minimise their corporate taxes. Designed by PwC (Ireland) tax partner, Feargal O'Rourke, the double Irish would become the largest BEPS tool in history, and would enable US multinationals to accumulate over US$1 trillion in untaxed offshore profits.
Official source
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