$43bn deal comes at a terrible time for Ireland
Here in Ireland we can puff up our breasts and deny that there is anything tax haven-like about this country but the rest of the world believes otherwise.
Poor Enda Kenny, who is chief theologian on the not-a-tax-haven side needs the Medtronic announcement like a hole in the head.
There is not even a pretence that this particular move is about anything other than tax. A few Dublin-based lawyers and accountants may be able to pay for another holiday home when they have finished with the paperwork but that’s about it. The Medtronic story is basically about one US company using Dublin to buy another US company and cut its tax bill back home.
The deal, the latest in a string of pharma deals involving Ireland and Britain, begs some interesting questions.
The most obvious question is why has there been a sudden rush of this type of deal in recent months. The most obvious answer would seem to be that US pharmaceutical companies have been tipped off about the closure of the loopholes in the US tax code which permit such takeovers. The stampede of tax-inspired deals could just reflect a new understanding of just how lucrative an Irish headquarters is but it is difficult not to suspect some deeper force is at work.
If there is indeed no plan to clamp down on this sort of tax deal, just how long do we believe that the US public will tolerate Ireland’s taxation laws.
There was widespread surprise when California governor Jerry Brown joked about Ireland’s “creative accounting” the other day during one of Mr Kenny’s visits to Silicon Valley.
Mr Brown seems to find our taxes amusing, but there are lots of signs that not many other people are laughing these days.
The €46bn Medtronic deal which facilitates massive tax savings could not have come at a worse time.