US tax amnesty will take billions out of Ireland

[Judi Lynn]

Sat, Nov 6, 2004


US tax amnesty will take billions out of Ireland

07/11/04 00:00


By Eamon Quinn, Business Editor

Billions of euro in profits generated in Ireland will return to the US as a result of a US corporate tax amnesty, which was signed into law by President George W Bush aboard Air Force One just days before last week's election.

The amnesty has also raised fears that US multinationals will slash the amount they plan to invest around the world, including in the Republic, over the next 12 months.

The American Jobs Creation Act allows giant US companies a once-off chance to repatriate $350 billion (E270 billion) in accumulated profits held around the world.

A significant chunk of these billions has been generated and kept in Ireland by US hitech and pharmaceutical giants which dominate the Irish economy.
(snip/...)

http://www.thepost.ie/web/DocumentView/did-734382767-pageUrl--2FThe-Newspaper-2FSundays-Paper-2FNews-2FIreland.asp

[54anickel]

1. This was the first article I've seen that mentions the tax break for

repatriating profits made overseas. And what a break it is! That's a lot of bucks flowing on-shore all at once! I'll have to remember this one for Monday's SMW thread.

snip>
The American Jobs Creation Act of 2004, which includes a range of corporate tax breaks, reduces the tax on "repatriated" foreign income from 35 percent in most cases to 5.25 percent, with some limitations.

http://www.infoworld.com/article/04/10/25/HNtaxreliefbill_1.html

Edit to add: Doesn't look like it's going to be used to create any frickin' jobs.

http://www.nwanews.com/story.php?paper=adg§ion=Business&storyid=98004

snip>

None has said hiring was part of their plans. Only 3M named higher research and development spending as a possible use for the cash, an expenditure that might lead to more jobs.

snip>

The law only prohibits spending proceeds on executive compensation. Any other spending must be spelled out in a "domestic reinvestment plan" approved by directors. Companies aren’t required to hire additional workers.

Likewise, they aren’t prohibited from buying back stock or reducing debt. "It will be interpreted as including these things but not restricted to them," said Greg Kelly, a federal policy analyst for Susquehanna Financial Group, an institutional brokerage and research firm.

Hewlett-Packard Co., Gillette Co. and Mattel Inc. wouldn’t comment on their plans. All three companies were heavily involved in lobbying for passage of the tax break.

[aneerkoinos]

5. Heh

It's been in the news here in Europe... :D

It's war and Bush is playing hard ball. I'd say this is smart move from Bush in the short range, looking good in the balance sheets of US economy, but long range back-slash might be considerable, US corporations end up with less vested interests in Europe and elsewhere and thus wits less political influence.

[thecrow]

2. Let's piss off and empoverish the Irish while we're at it

(from the link)
The companies, which lobbied for the tax break in the run-up to the election, are also big-name investors in the Republic. They include Dell, Intel, Oracle, Hewlett-Packard and Wyeth.

Irish tax lawyers have warned that the move to repatriate billions of euro from Irish subsidiaries back to the US will raise burdensome duties for Irish directors.

"They will need to be particularly aware of the statutory provisions before taking any steps to effect a repatriation of profits," said RobertO'Shea of solicitors Matheson Ormsby Prentice.

Under the US act, American companies can avail of a special corporate tax rate of only 5.25 per cent, down from the standard 35 per cent rate usually levied, for just 12 months.

[Az_lefty]

4. 35% reduced to 5%?

the chimp is bought and paid for and the sheeple don't care.

[VegasWolf]

3. And the Irish were doing so well, they have a strong manufacturing

base, no deficit, high technology centers, free press,
elected governance. Wait, I knew another country like
that a long time ago. Bush fucked it up too.

[dbt]

6. Like the Irish didn't already DESPISE bu$h!

You don't want to piss them off...

:evilgrin:
dbt

[xchrom]

7. god, i was just there...

ya know it just figures bush would come in with bad news like this -- i had a lovely time and now i have to think about this.
bush is a nightmare.

[Anarcho-Socialist]

8. Well they're true to form: wait until after the election to piss off

the Irish-American voters.