Ireland hits back at Obama’s ‘gaming the system’ tax criticism
Enterprise chiefs have defended luring companies to Ireland after US president Barack Obama accused multinationals of relocating to exploit unpatriotic tax loopholes.
In one of the most outspoken attacks on the state's popularity for big business, Mr Obama singled Ireland out for special criticism over firms "gaming the system".
The broadside prompted state investment agency IDA to insist that it does not promote the use of brass plaques for companies to base themselves in Ireland.
A spokeswoman said US firms which relocate solely for tax purposes and without a substantial presence bring no economic benefits.
"IDA Ireland's mandate is to create employment, investment and real tangible economic benefits for Ireland via foreign direct investment," the IDA said.
"Engagements with investors revolve around convincing them to place activity into Ireland that comes with real economic substance, including employees and fixed assets.
"Transactions that rely solely on tax benefits, without substance behind them, don't bring economic benefits to Ireland."
The IDA spokeswoman said the agency's work was focussed on job creation and capital investment.
Mr Obama's hardline remarks have taken the diplomatic row over tax avoidance by multinationals to a new level.
In a speech in California he accused the companies that relocate for tax purposes or use takeovers of smaller, foreign companies to create a new base of exploitation.
Later in an interview on business news television CNBC, the President named Ireland as one country where US companies are taking advantage of technically legal tax arrangements.
Ireland's standard corporation tax rate is 12.5%. In the US the same tax is about 35%.
The controversy also tainted a trade mission to California involving Taoiseach Enda Kenny earlier this year when, during a visit to San Francisco, governor of the state Jerry Brown took a swipe at Ireland's tax regime.
The politician said Apple was now an Irish company and said California would be an independent country if it had Ireland's tax laws.
Ireland is one of three countries being investigated by the European Commission over tax breaks which pulled in multinationals, including saving Apple