| Treasury changes to help Irish economy
BRITISH companies may soon look towards Ireland for business opportunities
following the relaxation of tax rules.
The Treasury in Britain is proposing to make it easier for British multinationals
to operate abroad.
The move could result in a one-off impact on the balance of payments in
the Republic if large numbers of British companies were to take the opportunity
to repatriate profits.
Currently, these profits are subject to Irish Corporation Tax at the rate
of 12.5 per cent, which is then allowed as a credit against British corporate
tax, and the funds are transferred between the Irish Revenue and the Treasury.
Peter Cussons, international tax partner with PricewaterhouseCoopers in
London, said: “All the British business groups, including the CBI,
have argued for this move, which they say will help Britain to remain
competitive as a headquarters location for British multinationals.
“Currently, a subsidiary of a British company pays tax at 12.5 per
cent on profits and then gets credit for that tax against the British
tax charge,” said Mr Cussons.
“I would expect some repatriation of profits to take place which
would be good for the parent company,” he added.
Currently, Britain is seen to be out of step with many European countries
over its attractiveness as a corporate headquarters location.
If the Treasury were to move, it would reduce the need for British companies
to set up offshore subsidiaries in locations such as the Cayman Islands.
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