Government distances itself from corporate inversion mergers
Minister for Enterprise Richard Bruton says Ireland has no interest in winning such deals
Richard Bruton said Ireland did not gain from corporate tax inversion deals
The Government has sought to distance itself from criticism over the latest corporate tax inversion with Minister for Jobs, Enterprise and Innovation Richard Bruton saying Ireland has no interest in winning such deals.
His comments come as US Democratic presidential candidate Hillary Clinton yesterday denounced the $16 billion (€14.7 billion) merger of Johnson Controls, a US maker of car batteries and heating equipment, and Tyco International, a Cork-headquartered firm that specialises in fire protection systems.
A tax inversion is a procedure in which a US company acquires a foreign-based firm and relocates its headquarters there in order to cut its tax bill. Recent examples of such inversions in Ireland include the Pfizer/Allergan and Medtronic/Covidien mergers.
Speaking on RTÉ’s Morning Ireland, Mr Bruton said Ireland did not gain from such deals.
“I think the first thing to say is that this is not a feature of the Irish tax code, it has absolutely got to do with the US tax code. We are not interested in winning such inversions. We’re not interested in them at all, the in fact cost us money,” he said.
This is not the first time that Mr Bruton has sought to defend Ireland in the face of criticism over inversions, which have become a major source of ire in the US. Following criticism of Ireland by US president Barack Obama in July 2014, the Minister insisted it did not facilitate such deals and said it was up to the US government to resolve tax obligation anomalies.
Speaking on Tuesday, Ms Clinton, the frontrunner for the Democratic presidential nomination, denounced the Johnson/Tyco merger.
“It is outrageous when large multinational corporations game the tax code and shelter money overseas to avoid paying their fair share, including through manoeuvres like inversions,” she said.
Her Democratic rival Bernie Sanders was also critical of the deal, describing it as “a disaster for American taxpayers”.
Republicans are also critical of inversions with presidential frontrunner Donald Trump recently calling the Prizer/Allegan deal as “disgusting.”