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Pfizer Inc., one of the world’s largest pharmaceutical firms, still wants out of the U.S. tax system. But rather than the U.K.—where it unsuccessfully tried to land last year—the company is focused on the Emerald Isle.

With a well-educated workforce, English-speaking population, and favorable tax treatment, Ireland remains a desirable destination for companies to allocate their profit or locate their headquarters.

And recent efforts to curb international tax avoidance may actually heighten this trend.

News trickled out last week that Pfizer is in early talks to merge with Dublin-based Allergan Plc, creating the world’s largest pharmaceutical giant—which would be based in Ireland. A year ago, Pfizer aggressively courted AstraZeneca Plc, based in London, and helped ignite a political firestorm over corporate expatriations. That effort was rebuffed, but Pfizer’s executives say they’re serious about this latest effort and are ready to weather whatever election-year political fallout may ensue.

The incentive for Pfizer to see Ireland as a desirable location may seem self-evident—the country has a 12.5 percent corporate tax rate, compared with the U.S. statutory rate of 35 percent. But that’s only the half of it. Quite literally, half—for profits connected with patents or copyrights, Ireland will soon offer a 6.25 percent rate as part of a “knowledge development" or patent box. Obviously, for a pharmaceutical firm with hundreds of patents, quite a bit of Pfizer’s profits could apply for this rate.

And, furthermore, that income could be justified with real operations on the ground. Allergan—which, by the way, became an Irish company through a series of inversions and purchases—already has thousands of employees in Ireland.

Rather than a mailing box on a sandy Caribbean island, this is what a future tax haven—if you can call it that—will look like. Whether that’s an improvement may depend on who you ask.

Ireland’s history as a favorable tax destination—which goes back decades, including a negotiation with Apple in the late 1980s over its tax treatment—has generally focused on making the country a gateway, not a final destination. Through elaborate structures such as the now-extinct Double Irish companies created subsidiaries which were simultaneously in Ireland and in a low or no-tax Caribbean jurisdiction, paying little in either country.

Those kinds of structures are on their way out, however. Populist anger has put many of them under a harsh spotlight, and has also helped fuel the Organization for Economic Cooperation and Development's Action Plan on Base Erosion and Profit Shifting, which aimed to update the world’s tax rules to help curb alleged abuse. The OECD’s standards are only voluntary recommendations—but as international norms of commerce, those recommendations carry real weight.

Two key provisions in the final BEPS report aim to implement the project’s stated goal of aligning taxable income with real economic activity. The first is a requirement that entities bearing the contractual obligation of risk have both the professional capacity to evaluate risk and the financial capacity to bear it. This is important because, in theory, what these tax haven entities are doing is helping to fund allegedly risky ventures for an overall corporate group. The new rules designate that for an entity to reap the rewards from a new patent or copyright, a mere contractual shifting of risk is no longer enough.

Second, the report states that patent boxes must be backed up with a “modified nexus” to be considered kosher. To determine nexus, tax authorities should look at spending on research and development, to see if enough economic activity exists to justify the tax break.

These and other BEPS items—such as a country-by-country reporting requirement which also may discourage companies from placing profits in low-employee subsidiaries—mean that it's getting harder and harder to justify a classic substance-free tax haven.

The basic idea is that the tax tail never “wags the dog” of actual operations. Tax benefits are too fleeting and unreliable to be a major factor in decisions about where to move people or facilities, or so the thinking goes.And even if corporations do make decisions based on taxes, that's fair so long as it's connected with real activity. The goal of international tax policy isn't to eliminate tax competition, it's to ensure that a company can't take advantage of one country's infrastructure and another's favorable tax regime.

So, for accountants and tax planners, the search for sandy beaches is off. The search for patent box regimes in areas with significant existing staff or facilities—or where they could be easily moved or hired—is on. And these structures may have a legitimacy that the previous on-paper-only structures did not.

The next big argument is likely to be over just how much income can be attributed to jurisdictions like Ireland. Sure, there are people there. But are those people enough to justify the amount of cash you’re reporting?

It’s the kind of analysis that can be very, very detailed and complex. A company like Pfizer has thousands of scientists working around the globe to develop hundreds of patents, which all interact. (A failed project to create a new drug may yield information used to develop another, for instance.) Imagine trying to identify which profits are attributable to which piece of intellectual property, which employees were involved in creating that property, and which senior executives made the crucial decisions to invest in that area.

Many critics of the BEPS project claim the final guidance adds just another dizzying layer of complexity on an already complex system, making it even harder for tax authorities in developing countries to enforce the rules. They also claim that the developing world was largely shut out of deliberations by the OECD, which by its nature is a Europe-centered organization.

Incorporating the OECD’s recommendations into treaties, regulations, and laws likely will take years—although it has already started to drive corporate behavior. In the meantime, Pfizer’s acquisition and inversion appears to be moving ahead full steam.