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Saturday 16 December 2017

Obama slams 'magically Irish' US companies

Tax loopholes

US president Barack Obama has blasted American companies that "magically become Irish" in order to avoid paying tax.

In his strongest comments against legal tax avoidance practices yet, Mr Obama accused companies that exploit Ireland's generous tax regime of "gaming the system".

"I don't care if it's legal, it's wrong," Mr Obama said. "It sticks you [the US public] for the tab to make up for what they're stashing offshore."

There has been an increasing trend of companies from America and other foreign countries setting up shell companies here to avoid paying taxes.

The practice has also become an issue in the UK and Switzerland.

But Mr Obama has singled out Ireland in his harsh rebuke of companies that try and reduce their tax burden, with the American government missing out on lost revenues.

"If you simply acquire a company in Ireland or some other country to take advantage of the low tax rate, you start saying we are now magically an Irish company despite the fact that you may only have 100 employees there and you've got 10,000 in the United States; you are just gaming the system.

"You are an American company, you continue to benefit in all kinds of ways from being an American company," he said.

In an interview with CNBC ahead of a talk at a technical college in Los Angeles, Mr Obama accused US corporations of exploiting an "unpatriotic tax loophole", to reduce tax.

"If you are basically still an American company but you simply change your mailing address in order to avoid paying taxes then you are really not doing right by the country and its people," he said.

Multi-billion euro deals by US firms for smaller Irish companies show the scale of activity, with the value of Irish mergers at €65bn this year.

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