Round Island One, which controls the licensing rights to Microsoft software programs sold in Europe, the Middle East and Africa, reported EUR3.23 billion (US$3.88 billion) in pre-tax profit for the 2004 fiscal year, the study carried out for Ireland's Sunday Business Post newspaper revealed.

With one of the world's lowest rates of corporate tax, Ireland offers significant tax advantages to American companies looking for a European base or seeking to reduce tax bills by booking sales through an Irish subsidiary, and Round Island One was one of five US firms in the top ten most profitable list. A unit of pharmaceutical firm Johnson & Johnson known as Janssen Pharmaceuticals was second on the list, while chip maker Intel, database giant Oracle and Forest Laboratories also featured in the top ten.

According to the Irish Times, Google, which recently announced a major expansion of its Dublin office, "significantly lowered" its tax bill for the first nine months of 2005 thanks in part to its Irish operation, with the firm's effective tax bill having fallen to 31% from 39%.

The revelations that US firms have been lowering their tax bills through their Irish operations has led some sections of the American media to label Ireland as a "tax haven". However, the Irish government has so far stood firm in its commitment to retain a low rate of corporate tax.

Nonetheless, Dell chief executive, Kevin Rollins warned in a recent interview with the Sunday Business Post that the computer giant would consider relocating if corporate taxes in the Republic increase.

The highest ranked domestic firm in the study was Allied Irish Banks Plc, which turned in a pre-tax profit of EUR1.41 billion in 2004.