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Ireland: Tax changes here won't drive out tech giants - Twitter boss

06 November 2014   (0 Comments)
Posted by: Authors: Adrian Weckler and Fionnan Sheahan
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Authors: Adrian Weckler and Fionnan Sheahan (Irish Independent)

Bosses dismiss jobs fear over tax loophole

One of Twitter's most senior financial bosses has said that the scrapping of the 'Double Irish' tax avoidance measure won't put the company off Ireland and that it is set to increase its investment here.

Speaking exclusively to the Irish Independent, the social network's president of global revenue, Adam Bain, said that abolition of the controversial tax incentive has not affected the way Twitter regards its Irish operations.

"I don't see why that would affect our investment here," said Mr Bain. "We're going to make a very concerted effort to continue to invest here and to grow out our team here, which is world class.

"Our team here is not only the best in Europe, it's the best in the industry. Ireland and our office here are regarded as models in our San Francisco office for how an operation should be run," he said at the Dublin Web Summit.

Fears had been raised that major tech companies could leave after Finance Minister Michael Noonan closed the tax loophole in last month's budget.

And the former chief executive of Apple, John Sculley, said yesterday that the Government risked losing Ireland's "edge" in attracting big business.

"It will be a challenge to get as much enthusiasm from international companies to locate in Ireland if there is a tax advantage somewhere else," said Mr Sculley. "Maybe Apple loses its advantage in Ireland. It could be a problem.

However, Twitter, which employs 200 people in Dublin, is understood to be sourcing a new office headquarters here to accommodate further growth.

Separately, the head of billion-dollar software firm Evernote told the Irish Independent that he was considering setting up a base here.

And earlier this week, Facebook executives said that the social networking giant was planning for its Dublin office to reach 1,000 employees, up from the 500 currently employed.

Taoiseach Enda Kenny also dismissed Mr Sculley's remarks, saying that the loss of the tax loophole would not affect what he called a "congested investment line" of foreign multinationals seeking to set up bases in the country.

"I think Apple are here for the long term and many of the others are intent on expanding and not contracting," he said.

"That's because of the range of technology, our track record and essentially our talent pool which is quite extraordinary given the flexibility of our education system."

He added that Ireland had "the courage to stand and end the Double Irish". "We ended the stateless concept last year, so we have nothing absolutely to be afraid of or fearful of here, because we have got an enormous talent bank, we have got a track record that is second to none and we have got the technology to meet any challenge," he said in an interview with Independent.ie.

Ireland has been an attractive base for US multinationals for decades, thanks to the Double Irish which enables companies to channel profits made in their major markets through the country and into tax havens, paying little tax along the way.

Following pressure from the US and EU, Finance Minister Michael Noonan said in the Budget that he planned to change a rule underpinning the loophole which enables a company to be registered in Ireland but not resident there for tax purposes.

The name 'Double Irish' refers to the schemes which involve multinationals setting up two Irish subsidiaries. Mr Noonan said firms already operating such schemes would have until 2020 to comply with the new rules. Immediately this sparked speculation that jobs would be under threat at major companies.

However, the head of a billion-dollar software firm currently considering whether to set up in Ireland said that the loss of the 'Double Irish' would not affect its deliberations.

"That [the Double Irish] is not one of the top five criteria for us in deciding whether or not to come to Dublin," said Evernote chief executive Phil Libin in an interview with the Irish Independent.

"We think that we need to be in the top centres for technology around the world. Dublin is one of those places. Our company is about getting the best talent.

"And what we're seeing here is great talent in engineering and other areas that are important to Evernote."

Mr Libin said that he was in discussions with the IDA on a possible base in Ireland.

Meanwhile, another multinational high-tech firm resident in Dublin has also dismissed any negative effect that the abolition of the 'Double Irish'.

"The tax structure might matter for Google and Apple but it doesn't matter for us," said Sam Chandler, founder and chief executive of Nitro, an online document software firm that employs 45 people in Dublin.

"It doesn't affect our decision here in the slightest. We're talent first, tax second. We just see thousands of talented people here. Dublin has become a mini Silicon Valley.

"It's certainly the closest thing we see to Silicon Valley in terms of the workforce available. We are definitely going to keep hiring here. We could get to 100 jobs here soon."

Mr Chandler also announced plans to open a data centre in Ireland and a $15m funding round from Battery Ventures, a US investment fund.

The tech executives' remarks may come as a relief to industrial policy bosses who have privately expressed concern about the possible effect of the Double Irish's abolition on investment decisions coming into Ireland.

Mr Kenny insisted yesterday that Ireland would continue to attract the best tech jobs available and that the popularity of the Web Summit was an example of the respect global executives have for the capital.

"Dublin is a really cosmopolitan city now and you have a massive international audience here so it is a great place to do this kind of summit," he said.

Mr Kenny highlighted that, despite changes to the tax regime, our 12.5pc corporation tax rate remains intact and pointed to the development of an information 'knowledge box.

"So I actually see the future as being even brighter for Ireland because of the fact that when you strip everything else away, the main essentials that you need for doing business in a country like Ireland are here and we can beat most of the competition internationally."

This article first appeared on independent.ie.



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