US Multinational Tax Talks ‘Gridlocked’
06 November 2013
Posted by: Author: Fiona Reddan
Author: Fiona Reddan (The Irish Times)
Discussions in the US over the tax practices of multinational corporations (MNCs) are "gridlocked”, attendees at a seminar at Trinity College Dublin heard yesterday.
the aggressive tax planning practices of MNCs, Frank Barry, professor
of international business and development at the school of business,
TCD, said the US’s efforts to require US MNCs to pay taxes on all their
profits stretches back to 1962. However despite recent discussions at
the Senate’s subcommittee on topics such as Apple’s tax practices, and
efforts by the Obama administration to amend the current regime, Mr
Barry said that the US authorities have an interest in continuing to
allow MNCs to retain their profits overseas, because it gives the US a
form of "soft power” in the jurisdictions in which US MNCs invest.
presentation took place as part of the Trinity International
Development Initiative, and Mr Barry also illustrated how MNCs can take
advantage of a clause in the Ireland-Zambia treaty. MNCs have used this
treaty to route loans through Ireland, despite being borrowed in the
Zambian currency and repaid via a bank account held by an Irish company
in Zambia. According to Mr Barry, such a structure, which ActionAid
earlier this year said in a report was used by Associated British Foods, prevents the Zambian government from imposing withholding taxes on such interest payments.
This article first appeared in irishtimes.com.