Tully Rinckey revisited Irish expansion plans after US tax reform

Matthew Tully

The firm’s Dublin office currently has three solicitors but hopes to grow to 10 by the end of 2018 and 35 within three years.

Founder Matthew Tully said the firm overhauled its plans after the Tax Cuts and Jobs Act of 2017 was signed into law late last year.

Instead of embarking on an “Irish inversion” strategy, where it would have moved its headquarters to Dublin for tax purposes, the firm reorganised its US operations and took advantage of new tax breaks on foreign operations.

In the US, the firm has been split into a professional limited liability company, which employs the attorneys and is taxed at 37 per cent, and a service corporation, which employs other staff, owns the firm’s leases and is taxed at 22 per cent.

Explaining the decision, Mr Tully told The American Lawyer: “Once the Trump tax plan was starting to move through Congress, we realized the advantages of inversion weren’t as compelling as splitting up the law firm and doing the service incorporation.”

In Ireland, Tully Rinckey also created a separate law firm and service corporation, whose majority ownership is a Delaware corporation controlled by Mr Tully and Greg Rinckey.

Under the new US tax system, US shareholders of a controlled foreign corporation can deduct 100 per cent of foreign-sourced dividends.