SanDisk probably don’t need to fear policy change either. Given deferral, the US is indifferent whether SanDisk books its income from Asian outsourcing in Ireland or in Taiwan. (And when they do eventually remit it to the US, a low foreign tax rate works to the US’s advantage because it means less foreign tax credit.) And far from deferral itself being under threat, the US just had an “amnesty” during which income stuck in foreign corps could actually be repatriated without paying the normal US tax.

(All very simplifed, TINLA, yadda yadda.)

And this is simply arbitraging of tax rates between different countries. Nothing to see here.

Same reason why most insurance companies operate out of the Bahamas.

SanDisk, struggling in the fiercely competitive memory market, will cut 250 jobs—or 10 percent of its workforce—as part an effort to save $30 million to $35 million a year.

Eli Harari, chief executive of the Milpitas maker of flash storage products, said excess supply of NAND flash memory has led to sharp price cuts in the industry, and he expects selling prices for SanDisk products to drop as much as 40 percent.

…
In addition to the job cuts, SanDisk will cut pay for its top executives, including a 20 percent reduction in base pay for Harari. (In 2005, Harari had base pay of $725,000, according to a SanDisk regulatory filing, plus a $1.74 million bonus and $15.7 million in stock-option gains.)

SanDisk will freeze pay for other employees at their current level and stop hiring except in what it called “strategic areas including product innovation and future generation technologies.’’ Costs related to the job cuts will be $15 million to $20 million, mostly in the first quarter, SanDisk said.

If I understand some basic parts of the strategem, you want significant revenues passing through a country (e.g., Ireland) to gain tax benefits while not losing the benefits from having significant operations in other countries (e.g., the US). The important word is significant, or substantial, as opposed to “all”.

There are also often treaties and international trade regulations that apply. For example, the US has reworked one of its tax provisions twice that I know of to bring it into line with WTO rulings regarding the subsidization of domestic production activities.

@jacob t. levy:
Given the complexity involved in setting up such a structure, and the potential liability, I would (as a non-lawyer who spent a bit of time at a tax place) venture to guess that, practically speaking, corporate officers can make a reasonably strong case that either they didn’t know such an achievement was possible and they’ll now be looking into it, or else they’ll toss the relevant chunks of the IRC at shareholders and say “Ok, show us how”, at which point the shareholders would most likely stop complaining, if only from being knocked unconscious by the impact of such a dense thing as the IRC.

ROI’s total tax intake was 33.4 bn Euros in 2004, which that Microsoft alone is paying about 3 percent of Ireland’s tax burden.

(numbers come from http://www.finfacts.com/irelandbusinessnews/publish/article_10003995.shtml and http://en.wikipedia.org/wiki/Taxation_in_the_Republic_of_Ireland#Government_revenue_and_expenditure)