Following pressure from the United States and EU, the Dublin government said it planned to change a rule underpinning this system which allows a company to be registered in Ireland but not resident there for tax purposes.

In his budget, Ireland's Finance Minister Michael Noonan has also announced changes to the intellectual property tax regime in the hope of keeping Ireland an attractive destination for business.

Ireland's plan to close a "Double Irish" tax loophole could cost U.S. companies including Apple and Google billions of dollars. Analysts and tax advisers predict that corporations which need access to the EU's 500 million consumers will find it difficult to set up equally effective schemes in other member states.

From January 2015, all companies newly incorporated in Ireland will be classed as Irish tax-residents. 

Companies already benefiting from the scheme can continue to do so until 2020, when the preferential 'double Irish' tax system will cease to apply. 

Ireland has been an attractive base for U.S. multinationals for decades, thanks to a tax regime which allows companies to channel profits made in their major markets through the country and into tax havens, paying little tax along the way.

International anger about corporate tax avoidance has made the Group of 20 biggest economies rethink international tax rules. It has also prompted EU investigations into tax deals between some member states and big companies.

The changes announced by Noonan are the latest in a series of international attacks on the contrived tax structures used to shift profits into tax havens.

Corporate filings show that technology companies have channeled tens of billions of dollars in profits which attract little or no taxation elsewhere, through Ireland under the current rules.

Ireland is not the only country that has allowed companies to channel profits into tax exempt firms. Amazon operates a structure whereby all its European sales are channeled through a Luxembourg company, which in turn channels profits into a tax-exempt partnership, also registered in the Grand Duchy.

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