Ministers in talks to reassure key foreign firms on closure of ‘Double Irish’
State agencies and Government Ministers and officials have launched a co-ordinated campaign of letters and phone calls to senior executives of foreign multinationals, to reassure them that Ireland remains a top destination for investment following the budget.
Minister for Enterprise Richard Bruton hosted a conference call with officials and executives from up to 60 US multinationals yesterday afternoon, to discuss some of the measures that might affect them.
On Tuesday, Martin Shanahan, the chief executive of the inward investment agency IDA Ireland, also wrote to about 1,000 companies to explain the State’s budget proposals relating to foreign direct investment.
The IDA is also preparing briefing materials on the budget measures for Irish embassies, which are used by the Government to help sell the country to foreign investors.
Sources suggested to The Irish Times yesterday that Michael Noonan, the Minister for Finance, also spoke over the phone directly with certain multinational chief executives to discuss the budget. It was not possible to confirm this with the Minister’s advisers last night, however.
Several measures within Tuesday’s budget will impact directly upon Ireland’s attractiveness as a foreign investment destination, including the closure of the controversial “Double Irish” tax avoidance scheme.
Other measures included fresh incentives to stimulate investment in research and development, tax incentives for intellectual property and the extension of the Special Assignee Relief Programme tax breaks for foreign executives who relocate to Ireland.
Mr Bruton’s teleconference yesterday formed the cornerstone of what one official insisted is a campaign of “positive engagement” to press home Ireland’s perceived advantages over its rivals and the new incentives in the budget. It is understood the teleconference was conducted on an off-the-record basis, and officials would not be drawn on which companies took part or what was discussed.
It is understood, however, the companies were all based on the west coast of the US, where most of the biggest technology giants are located. It would therefore seem likely that as well as the new incentives in budget, the Double Irish closure would have cropped up on the call.
Mr Bruton was joined on the call by Mr Shanahan of the IDA, as well as officials from the departments of Finance, Justice and the Revenue.
“We had a very positive engagement,” Mr Bruton told The Irish Times following the call. “I’m even more confident now than I was 24 hours ago that, with the [budget] measures, we will increase the attractiveness of our regime.”
The Minister is also scheduled to fly to the US in two weeks for discussions with executives from east coast firms.
Meanwhile, Mr Shanahan’s letter to 1,000 IDA clients on Tuesday evening highlighted that the 12.5 per cent rate of corporation tax is “settled policy and will not change”.
The letter referred to the closure of the Double Irish: “As the global landscape is evolving, Ireland has decided to change its corporate residency rules . . . IDA strongly believes that this will provide a reputations benefit for Ireland and our clients.”
IDA also said its staff in Europe and the US will contact all of their clients this week to discuss the budget measures. “We’re now in a position where current investors and potential investors know what Ireland’s corporation tax regime will look like post-Beps (base erosion and profit shifting).