Wednesday 22 November 2017

Ireland loses investor lustre over tax rivals, Apple ruling

The poll found Ireland is now viewed less favourable to investors after the Apple ruling. Photo: PA
The poll found Ireland is now viewed less favourable to investors after the Apple ruling. Photo: PA
Adrian Weckler

Adrian Weckler

Almost three quarters of international investors say that Ireland is now a less attractive place to invest than before.

The poll of 224 venture capitalists, bankers and other investors shows that 72pc now view Ireland "less favourably" as a location for multinationals after the European Commission's €13bn tax ruling against Apple and Ireland.

Meanwhile, just over three in five of the investors asked said that Ireland is no longer the most attractive country in Europe to invest in. Two thirds also squarely describe Ireland as a "tax haven", rejecting the Government's claim that Ireland is simply a low tax jurisdiction.

The poll, which was taken at the Web Summit's 'Venture' event for investors, comes amid speculation that the UK is to lower its corporate tax rates to compete with Ireland's 12.5pc rate.

The international investors also said that "regulation and labour laws" were "the biggest threat to the tech industry", while also citing the collapse of free trade agreements and a global recession as other threats.

However, over two thirds of the investors said that "access to talent" remained the most important factor when choosing where to locate in Europe.

British Prime Minister Theresa May was set to tell business leaders yesterday that she wanted to cut corporation tax to the lowest among the world's 20 largest economies, according to the 'Daily Telegraph'.

The newspaper said May could cut corporation tax to lower than the 15pc rate promised by Donald Trump before the US presidential election.

Cutting corporation tax from the 20pc headline rate could attract companies away from other parts of the European Union to Britain and challenge Ireland's pre-eminence as Europe's low tax home for large international companies.

However, tech multinational firms located in the UK have previously warned that their biggest concern over Britain's exit from the European Union lies in Britain cutting off worker mobility in and out of the EU.

"From my perspective, the single most important factor will be the ability to bring some of the world's most important talent to come work in the United Kingdom," Microsoft's president Brad Smith recently told the Irish Independent.

"I hope that we'll continue to be able to bring to the UK talent from across Europe and from around the world."

A majority of international investors say that Brexit is damaging to the European economy while three out of four say that it directly damages British startup, according to the Web Summit poll.

The investors also said that governments are failing to prepare for the impact of artificial intelligence, which is "set to destroy millions of jobs",

Some 53pc of the venture capitalists and bankers said it was "inevitable that artificial intelligence will destroy" livelihoods on a widespread basis.

The vast majority of investors (93pc) claimed that governments were "not prepared for the impact" of artifical intelligence on the labour market.

Earlier this year, Switzerland held a referendum on introducing a universal basic income, one of the initiatives proposed to deal with mass unemployment at the hands of robots and artificial intelligence.

The referendum was defeated but senior venture capitalists say it is the only answer.

Irish Independent

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