US ‘tax inversion’ deals skew Ireland’s FDI numbers (credit, 2015)

[edward222]

Credit to: Tax News : Seminal decision: US ‘tax inversion’ deals skew Ireland’s FDI numbers

A spate of so-called “tax inversion” deals involving companies based in Ireland appears to be distorting the country’s foreign direct investment (FDI) numbers, The Irish Times reports.

An OECD report suggests investment by Irish firms abroad more than doubled to US$75 billion in the first half of 2015.

The study links the unusually large outflow to a US$51 billion flight in equity capital in the pharmaceutical sector.

Two large mergers involving entities with Irish headquarters occurred during the six-month period.

US botox maker Allergan transferred its headquarters to Ireland through a reverse takeover of Irish-based drug maker Actavis, in a deal worth US$66 billion. Similarly, US industry giant Medtronic moved to Ireland through a merger with rival Covidien in a tie-up estimated to be worth US$48 billion.

So this is what they call tax inversion then.

[CBMD]

Here's a piece that ran on NPR yesterday. The issue has more to do with US tax code loopholes, than with Ireland per se. Ireland has long had a low corporate tax rate as a tool for attracting FDI, and probably gets into more trouble with other members of the EU over it. If it was illegal, I assume it would have been outlawed. US likes the freedom to set it's own tax rates ........

It might get worse before it gets better. A wrinkle I've seen theorized is that if the UK pulls the trigger on Brexit, Ireland will be the only English speaking country in the EU and would be likely to attract increased FDI, and by extension more inversions.


Pfizer Would Cut Its Corporate Tax Bill If It Merges With Allergan : NPR