Tuesday 21 November 2017

LinkedIn could be moving firm's IP to Ireland after Microsoft's €24bn takeover

Sharon McCooey, LinkedIn Ireland boss
Sharon McCooey, LinkedIn Ireland boss
John Mulligan

John Mulligan

LinkedIn is thought to be shifting some or all of its intellectual property to Ireland following Microsoft's $26bn (€24bn) acquisition of the professional social media platform.

The relocation of LinkedIn's intellectual property (IP) to Ireland would yield tax advantages for the business and follows a move by other tech and pharmaceutical firms to move their IP to Ireland due to changes in international policies designed to clamp down on tax avoidance.

LinkedIn, which has its EMEA headquarters in ­Dublin, declined to comment on what its precise intellectual ­property plans are. The ­company ­employs 1,000 people in ­Dublin, and announced plans last year to hire 200 more.

It said that a company just ­established in Ireland - ­LinkedIn IP Holdings 1 - had‑ been created as part of "normal business procedures".

Shares in the new company are owned by Microsoft Ireland Research.

The relocation of intellectual property to Ireland by multinationals has created a ­headache for the Central ­Statistics ­Office (CSO), ­skewing ­economic data and resulting in so-called ­'leprechaun ­economics', where Ireland's gross domestic ­product surged 26pc in 2015.

That was primarily the result of €300bn in capital assets - primarily intellectual ­property - that were transferred to ­Ireland by multinationals.

Read more: 'Work hard, play hard, be a better professional' - A glimpse into life at LinkedIn Dublin HQ

"In recent years, there has been a pattern of intellectual property products relocating to Ireland, either through purchases of intellectual property by Irish entities or through the relocation into Ireland of entire balance sheets containing intellectual property products," the Central Statistics Office said.

A number of multinationals, including Apple, are believed to have moved some or all of their intellectual property to Ireland over the past couple of years.

For the CSO, that has been problematic in determining Ireland's real growth.

When the IP is transferred to Ireland, it is often hugely valuable - often worth in the region of billions of dollars for big tech and pharma firms. It is deemed to be an investment in Ireland when the assets are moved here.

"We have seen a ­continuation of the trend in recent years of relocation of intellectual ­property products into Ireland in 2016," the CSO said earlier this month.

It has developed a new economic indicator - Gross National Income - designed to give a true measure of the economy's growth.

Irish Independent

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