Irish

Wednesday 30 July 2014

IDA touts low tax bill in sales pitch

Peter Flanagan New Technology Correspondent

Published 19/06/2013|04:00

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THE IDA is aggressively selling Ireland as a destination for companies looking to minimise their tax bill.

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The state investment agency is pitching this country's "generous" tax regime as it tries to attract overseas firms here, even after the fallout from the controversy surrounding Apple's use of this country to legally avoid paying billions of dollars in corporation tax in the US.

A 22-page slideshow, titled 'Tax Guide Ireland 2013' details the numerous ways foreign firms can benefit from Ireland's tax laws if they come here.

The presentation, which was compiled before the Apple row erupted, makes clear why a firm should locate here.

It highlights the headline 12.5pc corporation tax rate, but also "the additional elements of Ireland's broader Corporation Tax Strategy, eg 25pc R&D tax credit, an intellectual property (IP) and attractive holding company regime".

The IDA goes on to claim that "Ireland offers a transparent corporation tax regime accompanied by a rapidly growing network of international tax treaties with full exchange of tax information".

Many firms have set up their corporate or international headquarters here for tax purposes, and the document makes clear why.

"Thanks to our attractive tax, regulatory and legal regime, combined with our open and accommodating business environment, Ireland's status as a world-class location for international business is well established.

"In recent years Ireland has increasingly emerged as a favoured onshore location for MNCs (multinational companies) establishing regional or global headquarters to manage their corporate structure and head office functions associated with their international businesses.

Double

"Ireland's main tax advantages for holding companies include double tax relief available for tax suffered on foreign branch profits and pooling provisions for unused credits; no withholding tax on dividends paid to treaty countries or intermediate non-treaty subsidiaries; and access to double taxation agreements to minimise withholding tax on inbound royalties and interest, and additional domestic provisions to minimise withholding tax on outbound payments."

Many technology companies in particular use the low withholding tax to pay billions in royalties offshore through the notorious "Double Irish" tax avoidance scheme.

The paper also makes clear that, despite suggestions to the contrary, our tax regime, is "not under threat from anti-tax haven sanctions".

A spokesman for the IDA said the presentation was a "standard information brochure on taxation (that it puts out) every single year" and the information was "available from other sources like the Revenue Commissioners''.

Irish Independent

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