Saturday 21 January 2017

Data privacy is as important as tax, Google exec warns Noonan

Department of Finance officials were against 'knowledge box' in 2013

Published 12/04/2015 | 02:30

GOOGLE: Urs Holzle
GOOGLE: Urs Holzle

Ireland's data privacy regime is as important as its tax regime for attracting investment from Google, one of the search engine's most senior international executives warned Michael Noonan at a private meeting late last year.

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In November, the Finance Minister met with Google's vice president of engineering Urs Holzle, the company's eighth employee and the man who leads its technology planning and data centre efforts. Google Ireland chief John Herlihy also attended.

Data privacy was one of the main topics of conversation, records show. Holzle raised Ireland's policy of requesting information from internet companies, urging Minister Noonan to make sure the rules are clear.

"He said that the strength of a country's competent authority for data privacy was now as important an issue for a country's competitive edge as its competent authority for taxation," according to documents obtained by this newspaper.

Holzle posed Icland's model, where explicit legislation exists to clarify the ability of Governments to access information, as the ideal.

Ireland's data privacy record is under international scrutiny at present, after European privacy activist Max Schrems took a high-profile case against Facebook through the Irish courts.

As the European home for companies like Google and Facebook, Ireland's data protection commission is one of the world's most powerful - but is significantly under- resourced compared to many other national watchdogs.

Noonan and Google's chief financial officer also met at the height of the furore about the "Double Irish" to hash out Ireland's tax regime.

Heavily edited official documents reveal details of a private meeting between Noonan and Google chief financial officer Patrick Pichette, who announced his resignation from the world's biggest internet company earlier this year.

The Department of Finance's new secretary general Derek Moran was also in attendance at the meeting in late 2013. The documents reveal the Department of Finance's shifting stance on an aspect of corporate tax that would change dramatically less than a year later.

Noonan was extensively briefed on tax issues in advance of the meeting, including the issue of "profit shifting" by multinational companies and the introduction of a "knowledge box" tax incentive.

The "knowledge box" was unveiled by Noonan in last October's Budget and allows companies to lower their tax bill if they develop intellectual property in Ireland.

Briefings for Noonan's meeting with Google's Pichette show that his own department was strongly against the roll-out of a "knowledge box" a year before it happened.

Its introduction "may be seen by our EU partners as aggressive in the context of a 12.5pc corporation tax rate and could provoke a negative response", the Department of Finance briefing said.

At the time, there was no plan to introduce a "knowledge box", it added.

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