herald

Tuesday 17 October 2017

Bruton defends tax system after Obama's attack

Jobs Minister Richard Bruton said Ireland would welcome changes to US tax law to stop multi-national companies cutting their tax bills.

Ireland's corporation tax regime is back in the spotlight after US President Barack Obama singled out American companies who move to this country to cut their tax bill for criticism, branding them "unpatriotic".

The country's corporation tax is under scrutiny due to the multi-national companies locating here and availing of our low 12.5pc tax rate.

US politicians have accused Ireland of being a "tax haven" - a claim vehemently denied by the Government.

businesses

Mr Obama said businesses who relocate their headquarters to countries with lower tax rates, such as Ireland, are "gaming the system".

The US president said American companies were locating in Ireland with a small number of employees to avail of the low tax rate.

"Keep in mind that what we're trying to do is to say that if you simply acquire a small company in Ireland or some other country to take advantage of the low tax rate, you start saying we're now magically an Irish company, despite the fact that you may only have 100 employees there. And you've got 10,000 employees in the United States. You're just gaming the system," he said.

Mr Bruton said the current practice of tax inversion actually costs Ireland and said that any changes would be of benefit to this country.

"I don't think there would be any loss to Ireland should there be a change by the US, and I think most people would welcome a change. It is something Ireland would support, and the president is seeking to make such changes," he said.

Mr Bruton added that Ireland does not promote or encourage such investments nor do we want such investments being made.

benefit

"They actually cost us money and we get no benefit from them. They are the product of a peculiarity of the US tax system and we see many countries have arisen quite apart from Ireland."

Meanwhile, experts have warned a Dail committee that Ireland will lose €2bn a year worth of corporation tax revenue due to a planned international clampdown on where companies pay their taxes.

hnews@herald.ie

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