Ireland remains a “fantastic” place to invest, Varadkar tells US counterparts

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Tanacist Leo Varadkar will insist Ireland remains a ‘fantastic’ location for investment despite uncertainty over the future of the 12.5% ​​corporate tax in a two-way visit. days in the United States.

Visit to Washington DC comes as Ireland faces pressure to sign a deal with the Organization for Economic Co-operation and Development (OECD) that would see the introduction of a minimum global rate of at least 15% .

Bill McLaughlin, founder of the Irish-American Business Chamber & Network (IABCN), said Ireland was “still viable” as an investment destination for reasons other than tax.

But his advice to companies for now would be to “hit the pause button until it works out.”

Ireland-US Council executive director David O’Sullivan said his organization believes that a tax rate hike “would be a bad thing” and “absolutely” hurt foreign investment in Ireland.

International pressure

Taoiseach Micheál Martin reported during a visit to New York City last week that the 12.5 percent rate could change in response to international pressure to force multinationals to pay more taxes.

He said he would not commit to US companies “one way or the other” that Ireland will maintain the rate that has been the cornerstone of the country’s attempt to attract investment. foreigners for decades.

Mr. Varadkar, the Minister of Enterprise and Trade, will hold meetings with his counterparts in the Biden administration, US Secretary of Commerce Gina Raimondo and Ambassador Katherine Tai, US Trade Representative.

US President Joe Biden supports the OECD draft agreement, but it will have to be approved by Congress where Democrats have a slim majority.

Mr. Varadkar will also participate in a panel discussion with the US Chamber of Commerce during his two-day visit to the US capital.

Asked about his message to the United States in the absence of certainty on the 12.5% ​​rate, Mr Varadkar told the Irish Times: ‘What I will tell companies I meet is that Ireland remains a fantastic place to do business.

He listed four strengths that “set us apart” including a young and well-trained workforce and competitiveness “supported by an attractive business environment, which is a factor in many things, including our tax environment”.

Mr Varadkar also cited Ireland’s connectivity “with a diaspora of 70 million people and a truly international workforce” and its position “at the heart of Europe, its single market and the region. euro ”.

He added: “We cannot say at this stage whether or not we will sign an international agreement, but we will only sign it if we believe it is in the best interests of our economic interests in the round.”

Mr. McLaughlin’s own company, McLaughlin & Morgan, helps US companies enter the European market through Ireland.

The Philadelphia-based businessman and founder of the IABCN said that one of the missions of a business president is to “make the most profits, cut costs and lower taxes is a great advantage ”.

Mr McLaughlin said he did not think large companies would necessarily leave Ireland in the event of a corporate tax hike if the rate remained competitive, but also warned that “companies have moved for reasons less than that “.

“A difficult road to travel”

He said the Irish government had acted quickly to meet the needs of businesses and he said that a suggestion by Mr Varadkar last week that the 12.5% ​​rate could be maintained for companies making less than 750 million euros of turnover “resonates”.

But he predicted it would be a “really tough road” as “even Joe Biden who loves Ireland” is pushing for higher corporate tax rates.

Mr. O’Sullivan, a former IDA representative in the United States, based in New York, said: “Capital goes where capital is treated well. If you tell a business that you’ve made a deal for a 12.5 percent corporate income tax. . . and then it becomes uncertain that you don’t have to be Einstein to understand that it would be a cause for concern.

The Ireland-US Council considered that an increase in the rate would be “absolutely” detrimental to investment in Ireland, he said.

IDA Ireland said that, in its experience, companies are delaying their decision to locate in Ireland as the corporate tax debate continues and pointed to a “strong flow” of investment in 2021 to date .

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