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The corporate tax rate in the United States is 35%. The corporate tax rate in Ireland is 12.5%. (This is why multinationals like to incorporate their European subsidiaries in Ireland.)

If Microsoft moved money in the United States, it would pay the difference in taxes -- namely, 22.5%. But if Microsoft spent the money outside the United States, then it would not pay this difference.

Incidentally, Finland will be reducing its corporate tax rate next year, from 24.5% to 20%.



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