Obama tax proposals could damage American investment in Ireland

Business leaders face a serious threat over corporation tax rates

The American Chamber of Commerce in Ireland is not in a position to comment on the proposals until it has time to consider them.

A spokesman told the Irish Times that there are currently more than 600 US companies operating in Ireland.

“Ireland is attractive to these companies for a multitude of reasons,” he said.

“These include our well-publicised competitive and transparent taxation regime, a young, well-educated workforce, and our close ties to Europe.

“It is important that Ireland maintains its multifaceted attractiveness to foreign companies to enable the country to retain and grow investment.”

The Irish Times also spoke to a US economist and tax expert who recently gave evidence to the ways and means committee in the US House of Representatives.

Martin Sullivan told the paper that Ireland had benefited more than any other country from the fact that US corporations don’t pay US tax unless they repatriate their profits.

“So, Obama’s proposals to significantly curtail those benefits are a serious threat to the Irish economy,” he warned.

“The threat is not just from the Democrats. Tax reform proposals by some leading Republicans contain similar anti-abuse rules.

“It is still an open question in the debate in the US as to whether low tax income from active businesses, such as exist in Ireland, should be caught in the net.

“Most legislators would prefer limiting the tax hit to low-tax income where there is no measurable real business activity as in Bermuda and the Cayman Islands.”

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Nster.com