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IRELAND’S ABILITY TO attract major companies to its shores could be under threat after US financial officials moved to stamp out so-called “inversions”.
The US Treasury stepped in yesterday to stop the “creative techniques” companies were using to avoid its taxes, saying its plans would either get rid of inversions altogether or at least cut the economic benefits to businesses which exploited the techniques.
Several major US companies, including recently medical manufacturer Medtronic, have planned to shift their tax bases to Ireland with the lure of the country’s low corporate tax rate of 12.5% – compared to a nominal rate of 35% in the US.
Treasury secretary Jacob Lew said the tax reforms would mean offshore deals would no longer make economic sense for some companies considering inversions.
“Inversion transactions erode our corporate tax base, unfairly placing a larger burden on all other taxpayers, including small businesses and hardworking Americans,” he said.
It is critical that this unfair loophole be closed. This shifting of a firm’s tax address is not the same as a merger driven by business reasons, such as efficiency or expansion.These transactions may be legal, but they are wrong, and our laws should change.”
So what are these inversions?
An inversion deal involves a company setting up in a new tax home after merging with or taking over an overseas business.
The offshore partner then “owns” the company’s earnings for tax purposes, but can still keep using the money as part of its US operations mostly – or completely – tax free.
But the Treasury move would stop overseas offshoots of US companies being treated as independent from their parent businesses and close a loophole allowing “hopscotch loans” between parts of the same company being used to shift profits without being taxed.
Earlier this year, US-based Medtronic announced it was shifting its tax base to Ireland after buying out major local player Covidien in a €32 billion deal.
The inversion came despite €48 million in penalties the US government levelled at its executive for taking the company offshore for tax purposes.
A TheJournal.ie poll which asked if Irish tax laws should be reviewed to stop companies “gaming” the system showed most readers didn’t care about US companies shifting their tax base here to maximise their profits.
Obama glad
President Barack Obama, who has previously singled out Ireland in his criticisms of US companies’ tax shifting, said he was glad new action was being looked at to “help reverse this trend”.
We’ve recently seen a few large corporations announce plans to exploit this loophole, undercutting businesses that act responsibly and leaving the middle class to pay the bill,” he said.
At least they’re not still talking about the “Double Irish”
The US announcement comes less that a week after the OECD unveiled the first part of its multi-step plan to reform international tax-avoidance schemes – including the infamous “Double Irish” tax loophole.
The tactic involves multinationals using Ireland as a jumping-off point to a tax haven like Bermuda to avoid paying their tax bills.
Jobs Minister Richard Bruton yesterday signalled Ireland could move to close the loophole in the budget ahead of any international agreement.
READ: Obama accuses companies that relocate to Ireland of ‘gaming the system’
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I’m Irish too and we don’t normally have parties on graves or monuments to the dead. Doesn’t particularly offend me if we did but it isn’t some Irish thing like he is making out
@Kal Ipers: all the same it’s satisfying to see paddy chow down on some humble pie
@Shane Murphy: Why?
@Kal Ipers: because the Irish hate to see each other do well. Rise above the parapet and we’re ready to knock them down.
@Kal Ipers: Because Shane begrudges successful people who have worked hard to become who they are.
@john Appleseed: I don’t hate success. But I do despise C***s. If this guy was a down and out I suspect I would still feel the same way.
@the phantom: So what did he do to you or offend you so much?
@Kal Ipers: I think Paddy is fast becoming the Lewis Hamilton of the Tech World – really talented and very much at the top of his game but very hard to like!
@the phantom: Bit you don’t explain why.
@Kal Ipers: I was just thinking the same, Karl.
The Conor McGregor of events management. Thinks they can do what they want as they have fawning rich people using them, and then claim it is something “Irish”.
@Gulliver Foyle:
Actually felt a bit sorry for him until I read his “apology”.
This was clearly being used as a political football – there were several other dinners held at the site over the last few yeas apparently, all with the blessing of the old administration.
But that horse manure about our different approach to death….we celebrate it….what complete trash.
Don’t recall much celebrating at any of the funerals I was at for those who took their own life.
What is so difficult about just saying a simple sorry and moving on? Why do their egos not allow that?
@Brinster: Because we now live in the age of spin. Where it’s ‘clever’ to apologise, but at the same time, not apologise.
@Gulliver Foyle: if Eva Longoria is one of these reach people you speak about then I’m open to be used a little…. or a lot…. Just putting it out there
Being Irish has nothing to do with it, It is a simle matter of having respect for the dead – we don’t hold barbecues in Glasnevin
@Tom Purcell: No but we deposit busloads of tourists to wander around, probably many munching on some kind of snack.
Apologies if you feel it’s necessary but don’t blame it on being Irish. It has absolutely nothing to do with it.
Can’t imagine him being allowed to put on a big feed for his rich friends in the Garden Of Remembrance but then again maybe he is the type that likes to drink in graveyards……
@Larry Doyle: you have a poor imagination Larry. If you had read the article you would see they had a dinner in crypt of Christchurch cathedral. Hardly a stretch to imagine similar events in a graveyard, is it?
@Zx5vZulB: big difference between the tomb of strongbow and the resting place of recent presidents and, er, eusebio. I always thought it was the medieval setting when they did that nonsense in Christchurch, not realising it was to dine with dead bodies in a cultish manner, thinking they’re some sort of freemasons.
Thanks for the review of my imagination gar, it was very imaginative.
Cosgrave took his money and operation and ran to Lisbon… I don’t like the false idolization of the man at all but I wouldn’t begrudge him the success.
Paddy is Irish when it suits his apologies and it’s Cosgrave International when he got too big for his boots here… Cant have the cake and eat it too Paddy.
@Ciarán FitzGerald: As far as I recall, no Irish venue could produce the quality of service he required to hold his exhibit. It was out of necessity he moved the show to Portugal.
Causing problems wherever he goes…
@Darach Malone: like Sideshow Bob
This is a minor controversy which will soon be dead and buried.
@Fiona deFreyne:
Yes, it needs encryption to avoid any further breach.
Since when do the Irish celebrate death? Do we not celebrate the life of the the deceased? I don’t know any Irish person that celebrates death. Anyway, another non story about Paddy pout.
He’s a self righteous Pain.
Being forced to apologize for something that was completely legal. M
@Steve: he wasn’t forced to apologise he was criticised for being disrespectful! The guy was probably advised to apologise by his public relations officer!
Why is he apologising? It’s not like he owns the place. I assume he paid a pretty price to have the function there. Surely whoever looks after the place should be the one’s apologising!
He seems to have a thing about eating his din dins on consecrated ground.That seems right for his morbid personality.
Dear Paddy Cosgrave, I`m Irish , we don`t `celebrate death`, we celebrate the lives of our loved ones and heroes who have passed on, and we pay our respects and commemorate them in the appropriate manner just as the Portugese and every civilized nation do.
Would it be appropriate to host a web event at The Garden of Remembrance, or Arbor Hill or Glasnevin cemetry for example. Would be be appropriate to host a web event at the cenotaph in London for example, or war graves in Belgium and France. Crass insensitive and insulting to the intelligence of the Portugese people.
thank fu<k we donlt have to listen to this gobsh!te here any more.
to say the reason is rooted in Irish tradition is an insult to all Irish people everywhere. he should apologise to us now.
and as for this "I love this country as a second home and would never seek to offend the great heroes of Portugal’s past.". disgraceful comment. portugal should never be permitted to forget what it founded off the backs of others. in the name of god. terrible history
Wouldn’t begrudge the guy success but his attitude stinks
Social events are regularly held in the Pantheon in Paris where many of the great figures in French culture and history are buried. Of course the Pantheon is no longer a church.
As long as the deceased occupants are invited to join in the festivities, I see no major issue. You rarely hear the dead complain.
That lad is so far up his own arse it’s not even funny.
@MyBrokenKnees: He’s so far up there he can see his dinner
Enda will be knocking back a half one and smiling.
Suits him to be Irish when he needs it!
Clown full stop.
As I’m Irish, Im planning a huge party next week in glasnevin cemetery on my granny’s grave. Followed by a few cans in the pro-cathedral. The usual irish party. All welcome. Even Paddy.
This Steve Jobs wannabe is quite the clown
Shocking anger in some of the twitter responses.
This has nothing to do with Paddy C. The legislation from the troika days allows the rental of these places for dinners . I think it should be revoked for this particular building but that’s another matter .
Portuguese press and internal political wars have made a storm in a tea cup . The faux outrage will be , as usual , short lived .
It depends,What was on the Menu ?
@Brian O Reilly: Chips.
Bit Kevin Spacey-ish.
Dear Portugal
Mr Cosgrove is a fool if he thinks you should believe him in what he says. Partying on the graves of hero’s. Disgraceful and disrespectful to the people of Portugal
WTF?
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