Saturday 1 October 2016

Clinton told 'focus on election' as TDs defend Irish tax system

Published 27/01/2016 | 02:30

Ms Clinton previously criticised a similar deal between drug giant Pfizer and Ireland-based Allergan in November. Photo: Justin Sullivan/Getty Images
Ms Clinton previously criticised a similar deal between drug giant Pfizer and Ireland-based Allergan in November. Photo: Justin Sullivan/Getty Images

A government TD has said Hillary Clinton should focus on her election campaign rather than criticise a merger that will see a US company move its headquarters to Ireland.

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On Monday, Johnson Controls announced a plan to buy Cork-based Tyco International for $16.5bn (€15.2bn).

Ms Clinton, a Democratic presidential candidate, responded to the move of the company's headquarters to Ireland by branding so-called tax inversion deals as "outrageous".

She said that if elected she intended to block similar moves with an "exit tax".

"These efforts to shirk US tax obligations leave American taxpayers holding the bag while corporations juice more revenues and profits," she said.

Cork South Central TD Jerry Buttimer last night said Tyco had been "a very important employer in Cork" and that the merger deal was "within the parameters of the law".

He pointed out that Ireland's 12.5pc "corporation tax rate is set at the level it is to attract the investment into the country".

"I think Hillary Clinton should focus on her own campaign to get elected to the presidency in America and she's better off looking after herself," the Fine Gael TD told the Irish Independent.

Ms Clinton previously criticised a similar deal between drug giant Pfizer and Ireland-based Allergan in November.

The inversion deal between Johnson Control - a US car battery and heating and ventilation systems manufacturer - and fire safety and security firm Tyco is set to save the new entity $500m (€461m) in taxes in its first three years.

Tyco, originally a Swiss, company previously moved its headquarters to Cork in 2014 after earlier announcing plans to employ as many as 700 people in the city.

Another local TD, Fianna Fáil finance spokesman Michael MrGrath, called Ms Clinton's comments "simplistic".

"The business case has to stack up before any transaction would take place. To claim that companies in such instances are motivated solely by tax considerations is completely misleading.

"Our corporation tax rules are in accordance with OECD guidelines on taxation," he said adding that he believes the Government should be "more proactive" in making the case "definitively for retaining autonomy on tax matters".

"The Government needs to communicate this clearly and counter any misinformation or confusion that exists in respect of how we apply our rules no matter where that source may be," Mr McGrath said.

A spokesman for the Taoiseach said that Ms Clinton wasn't attacking the Irish tax system, but the one in the United States. He said Ireland is "fully compliant" with international tax rules and added "we're not moving off 12.5pc".

Social Democrats co-leader Stephen Donnelly said Ms Clinton's comments should be taken "very seriously" and that Ireland had to be careful not to get a reputation as "a country that supports tax avoidance".

He said the best way to do this was to comply with an OECD project which is providing governments with solutions for modernising international tax rules.

He said Ireland's 12.5pc tax rate is "perfectly legitimate" and should be "defended rigorously".

Irish Independent

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