Business

Thursday 18 September 2014

Yahoo's decision to move operations to Ireland was a 'commercial decision' and not done for 'tax reasons' - Enda Kenny

Colm Kelpie in Paris

Published 07/02/2014 | 15:44

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Yahoo! President and CEO Marissa Mayer. Photo: Ethan Miller/Getty Images
Yahoo! President and CEO Marissa Mayer. Photo: Ethan Miller/Getty Images

TAOISEACH Enda Kenny has said Yahoo's decision to move its data processing operations to Ireland was a commercial decision and he again defended Ireland's tax regime.

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It comes as a senior official with the Organisation for Economic Cooperation and Development (OECD) said the global organisation was trying to close down tax loopholes, such as the Double Irish.

Grace Perez-Navarro said it wasn't in Ireland's interest to allow it because the state wasn't receiving any corporate revenue from it.

Yahoo looks set to attract a privacy audit from the Irish Data Protection Commissioner after informing the watchdog that it is moving all of its data-processing facilities from Europe to Ireland.

The internet giant, which is currently struggling with falling sales, also informed its European customers that was increasing its Dublin workforce.

But the move has made headlines in French newspaper Le Monde amid claims the decision was taken for tax reasons. It will likely cast the spotlight further on to how Ireland taxes multinationals.

''This is a commercial decision by Yahoo. It is not a directed decision from anybody'' Mr Kenny said.

''We have all of these companies in Ireland and the cluster impact creates its own energy and its own dynamism and it's own structure.

''Ireland has been very forthright and very upfront about our corporate tax position."

Ms Perez-Navarro, deputy director of the OECD Centre for tax policy and administration, said the OECD was trying to close down loop holes through its global tax work and attempt to increase transparency.

She said the Double Irish was one of the loopholes and she said the OECD was working with all countries to try to eliminate them.

''As you know, through the Double Irish, Ireland doesn't get any corporate revenue from that so it's not in Ireland's interests to have that,'' she said.

''It's in Ireland's interest to attract businesses that create jobs and businesses that pay their 12.5pc corporate tax.''

''If they're (Yahoo) moving there because of the attractive corporate tax rate, that's one thing. If they're moving there because of loopholes, these loopholes are going to be closed down, so it's not a very clever move.'

It comes a day after French President Francois Hollande insisted France would not continue to tolerate the tax optimisation strategies used by multinational internet giants such as Google.

France is one of a growing number of nations to pursue more aggressively what they see as abuse of tax and accounting rules that allows some multinational companies to pay less tax.

The Taoiseach, Tanaiste Eamon Gilmore, Education Minister Ruairi Quinn, Jobs Minister Richard Bruton and Social Protection Minister Joan Burton attended meetings at the OECD's headquarters in Paris earlier today to discuss Ireland after the bailout.

Mr Kenny said the OECD had particular expertise that was valuable to Ireland in particular sectors.

''The OECD don't tell us what to do but they look at the circumstances and give advice that they think would be in Ireland's interest''' he said

''Some of their experiences in the past has been very helpful to us. Particularly in the area of structural reforms, labour activation measures, dealing with skills inefficiencies in our system. So in those areas in particular, we think this is very interesting.''

Mr Gilmore said the Government is not basing the recovery around a return to the Celtic Tiger years.

''We're not planning a return to the Celtic Tiger years. One of the things that we discovered was that tigers can be unpredictable, dangerous, and are best admired in the wild,'' he said.

''There were mistakes made in our economy. It was over-dependent on speculation, the light touch regulation and over-dependence on one particular sector and we don't plan on recreating that.

''What we're about is the building of a sustainable economy, learning the lessons from the crisis.''

Secretary General Angel Gurria said the toll of the crisis has been heavy on the Irish people.

''Ireland has undoubtedly faced very serious challenges in recent years. The toll of the crisis has been heavy,'' he said.

''These are tough challenges. But not tough enough to bed the Irish perseverance.''

Irish Independent

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