Obama tax proposals could damage American investment in Ireland
Business leaders face a serious threat over corporation tax rates
The Irish government is worried about President Barack Obama’s proposed changes to his country’s corporation tax regime and fear it may impact on direct foreign investment in Ireland.
Some 600 American companies currently take advantage of the low corporation tax in Ireland but business leaders fear the Obama proposals could damage that.
Irish corporation tax currently stands at 12.5 per cent, considerably less than the 35 per cent rate in the United States.
The Irish Times newspaper reports that President Obama has proposed the imposition of a minimum tax on US companies’ foreign earnings as part of an effort to reduce incentives in the international tax system for US companies to shift income and investment overseas.
The proposals, released on Wednesday, did not state what the minimum tax rate should be when the changes are introduced late next year at the earliest.
The paper states that, at present, US subsidiaries based in Ireland do not have to pay the difference between Irish corporation tax rate and the US rate so long as they don’t repatriate their after-tax profits.
US treasury secretary Timothy Geithner outlined the proposed reforms.
He said: “The president believes we should strengthen the international tax system.
“Today’s global economy provides strong incentives for companies to shift investment and profits to countries with low tax rates. We want to reduce the opportunities the tax code now provides to shift income and investment outside the United States.”
The report says that Geithner also stated that the administration was proposing a new minimum tax on foreign earnings, stronger safeguards on transfer pricing abuses, and replacing tax deductions US companies can get for relocating overseas with tax credits for expenses for companies that move operations back to the US.
The paper says the Obama administration wants to abolish a range of loopholes as part of a move to expand the US tax base, using the additional revenue to fund a cut in the corporation tax rate to 28 per cent.
The Obama regime wants to reduce incentives and opportunities to shift income and assets overseas.
He added: “For example . . . US companies may use accounting rules or aggressive transfer pricing to shift profit offshore. This is particularly true in the case of profits associated with intangible assets, like intellectual property.”
The American Chamber of Commerce in Ireland is not in a position to comment on the proposals until it has time to consider them.
- Gay teacher fired from Catholic school after...
- Nelson Mandela once considered a terrorist...
- Racist incidents in Ireland up by 85 percent...
- Nelson Mandela was against IRA decommissioning.
- Irish radio presenter suspended after anti-Isra
- Unionists regret US envoy Haass’ call for...
- Hollywood star Gabriel Byrne brands new Pope...
- Website attracts 80,000 Irish people ready...
- Photo shows Irish revolutionaries three years...
- Top ten negative terms used to describe Irish...
Barry - Why do we seem to have more sympathy for the Irish? Because they are our own people!Racist incidents in Ireland up by 85 percent says Immigrant Council
Barry you may wish to study this ... recent report from Organisation for Economic Co-operation and Development (OECD) ... six countries - Germany, FraSmithwick inquiry finds Irish police may have colluded in two IRA murders
INorth….Agree both were gross misuses of parliamentary privilege, but that’s not quite how the lawyer allegation happened…speakerNelson Mandela was against IRA decommissioning its arms during 2000 talks
History is amazing in the way villains can become transformed into heroes. Mandela never ever apologised or resiled from his position ordering the sho