Ireland is the most profitable country in the world for US corporations, according to a new report.
The study by the influential US tax journal Tax Notesfound that profits made by US companies in Ireland doubled from 1999 to 2002, while profits in most of the rest of Europe fell.
While Luxembourg showed a greater profitability rates for US corporations, Ireland was found to have a much larger "real economy" and produced the greatest profitability.
The report found a huge shift in the movement of capital towards tax havens such as Ireland and Bermuda, away from higher tax countries such as Britain and Germany.
The report said: "In low-tax Ireland, for instance, profits of subsidiaries of US multinationals have doubled in four years, from $13.4 billion to $26.8 billion.
Profits from operations of US multinationals in no-tax Bermuda have tripled, from $8.5 billion to $25.2 billion.
Not surprisingly, those two tax havens rank as the number one and number two locations in terms of profitability for US corporations operating abroad — surpassing long-time leading investment partners like the United Kingdom," the report found.
The analysis, by former U.S Treasury Department international taxation specialist, Martin A Sullivan, found that US multinational corporations made $2.01 profit in Ireland in 2001 for every $1 they made in 1999.
In Britain, US multinational profits dropped sharply, with profits dropping to 67 cents in 2001 for every $1 profit made in 1999. In Germany, profits in 2002 dropped to 46 cents for every $1 made in 1999.
The report also found that, in 2002, US companies took $149 billion of profits in 18 tax haven countries, including Ireland. This figure is a jump from up $88 billion in 1999.