China holds $1.2 trillion in US foreign debt. Ireland holds $300 billion. That's more than Ireland's GDP. How did this happen, and what part of international finance explains such a huge holding by such a small economy?
@kudos this is the popular arrangement for dodging taxes in Europe fwiw
@theoutrider It seems more like they're dodging taxes on repatriation. They've learned they can get discounts on these taxes, so they're most likely waiting for that.
@kudos the usual setup over here is that the Irish subsidiary will have taken out enormous loans from their US parent so taxable profits get written off against the cost of those (because business loans are often deductible in an attempt to encourage people to start businesses). I wonder how that ties in with EU subsidiaries holding US debt in turn - plausibly the exact same setup but in the other direction?
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