‘Ireland Inc’ summit: US-Irish business mergers ‘are not about avoiding tax’ says ambassador
Countries that work together like Ireland and the US “need to be cognisant” of the impact their tax policies have on each other, new US Ambassador to Ireland Kevin O’Malley said in a speech yesterday.
He said cross-border mergers can make the Irish and American economies stronger, but that “these transactions should be driven by genuine business strategies and economic efficiencies, not a desire to shift the tax residence of the parent entities simply to avoid taxes”.
Mr O’Malley said he welcomed the Taoiseach’s recent remark that he is not a supporter of tax inversions.
“I think therefore, that we share a common interest to ensure that the US-Irish investment relationship continues on the remarkable, remarkable trajectory it is on,” he added.
Mr O’Malley said prudent tax policy is part of what makes an innovative economy. “Infrastructure, education, research and human talent, those are the things that really create new wealth, but those all need steady tax revenues.”
Mr O’Malley said the Irish Government has played a “very forward-leaning role” in the OECD’s Base Erosion and Profit Shifting project, which is designed to tackle tax avoidance by multinationals.
Breaks
His comments came days after a ‘New York Times’ editorial headlined ‘Ireland, still addicted to tax breaks’ railed against the Irish tax system, despite the Budget’s closing of the controversial ‘double Irish’ tax arrangement.
The editorial said policies like the new “knowledge box” – which will allow some companies that make money from patented products and services pay a lower tax rate – have “numerous problems”.
It argued that the policies benefit some companies over others and could create a “race to the bottom” between countries on tax give-aways.
The ambassador spoke at the inaugural ‘Ireland Inc’ summit, which brought business leaders together to discuss a ‘Working Plan for Ireland’.
Event organiser Ian Hyland said the argument about the Irish tax regime is “nearly over”.
“We have made provisions now . . . I think one thing we’ve got to be really conscious of . . . is that we’re all in a race to the top, we’re competing with lots of different nations for the same group of people,” Mr Hyland said.
“An issue had to be addressed, and we’ve addressed the issue . . . other nations have similar problems when you dig into it. I think the real burning question is that we all need now, public and private, to get together and ensure going forward that we can compete for the real jobs.”
Other speakers at the event included Web Summit co-founder Paddy Cosgrave and IBEC chief executive Danny McCoy.
Mr Cosgrave said he thinks it is “great” that Irish people are loved around the world, but said “I think it would be almost greater if we were respected for our ability to trade and to hustle across borders.
“Our progressive tax system, if you want to call it progressive, is the price that we have to pay to stop people coming out on the streets and eventually electing into power a centre-left government,” he added.
He said that in the debate around tax cuts, IBEC has a responsibility “not to play into the hands of Sinn Fein”.
“I hope Danny McCoy, who’s sitting directly in front of me, isn’t a sock puppet for Gerry Adams . . . and you don’t operate in a way over the next few years that essentially opens the door to these people by frustrating a large cohort of the actual population.”
Mr McCoy said that calls for tax cuts were aimed at increasing tax revenue rather than reducing it.
Irish Independent
