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Austerity in an Age of Jurisdictional Arbitrage

November 22, 2010

Many American corporations have used Ireland as a foothold in Europe because its corporate tax rates are relatively low. But now with all that meat on the table, the E.U. wants debt ridden Ireland to bite

The Irish government has been given a stark warning from some of the biggest American companies in Ireland on the risk of a mass exodus if the country’s low corporation tax rate is raised. The warning – from executives at Microsoft, Hewlett-Packard (HP), Bank of America Merrill Lynch and Intel – spoke of the “damaging impact” on Ireland’s “ability to win and retain investment” should the country’s corporation tax rate be increased from 12.5pc…

Nicholas Sarkozy, the French president, said yesterday that while raising taxes will not be a condition of the bail-out, he expects Ireland to raise its corporation tax rate.


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