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International Tax and Transfer Pricing
Tuesday 5 March 2019
WHAT TREASURERS NEED TO KNOW
TAX DEVELOPMENTS
March 2019
Legislative Tax Update
Overview
►Interest Limitation Rules
►Transfer Pricing
►Controlled Foreign Corporation (CFC) Rules
►Multi‐Lateral Instrument (MLI)
►Anti‐Hybrid Rules
►Digital Taxation
►US Tax Reform
What’s happening?
EY | Assurance | Tax | Transactions | Advisory
Ernst & Young LLP
© 2016 Ernst & Young LLP. Published in the UK.All Rights Reserved.
ey.comEY‐000016378‐01 (UK) 12/16. CSG.
ED None
Current as at 1 March 2019
International Tax ServicesGlobal Developments Road‐Map
5 December 2016:Clauses introduced in Finance Bill 2016
5 April 2017 to 30 September 2018: Proposed period in which taxpayers must correct affairs before new Failure to Correct penalties
13 October 2016:Criminal Finances Bill introduced
New development/ legislative start
date
Consultation/other
1 January 2019 implementation date:• Interest limitation: 30% EBITDA (2024, latest,
if equivalent rules in place);• CFC • GAAR
1 January 2016: Country by country reporting in EU
2019/2020?: Possible introduction of mandatory CCTB:• For groups with turnover>€750m; Broadly defined base (NID regime, participation exemption,
NOL c/f, R&D); TP (upwards only); Includes ATAD measures
I January 2021?: CCTB converts into CCCT.One tax return for EU.
Profits shared across EU: allocation keys (sales, labour, assets (Excluding intangibles): 1/3 each
EU Common Corporate Tax reform: CCTB/CCCTB
EU Dev
elopmen
ts
Anti‐Tax Avoidance Directive 1 & 2
Country‐by‐Country Reporting in EU
2018 2020
2017 2021 1 July2021
1 July2018
1 July2017 2019 1 July
2019
OECD Multi‐lateral Instrument
Global D
eve
lopmen
ts
BREXIT
US Tax Reform
OECD Country‐by‐country reporting
Expected milestones Definite milestones
EU Intermediate Holding Company rules
Critical period of change
29 March 2017.Article 50 triggered.
30 December 2017:First filing of CBC Report.
I January 2020: • Anti‐ tax free exit rules• Anti‐Hybrid mismatch rules
1 January 2022:• anti‐reverse hybrid
taxation
Possible start date
EU Holding Company required for non‐EU Globally systemically Important Institutions or Third‐country groups that own two or more institutions (credit institutions or investment firms) established in the EU with total assets of at least EUR 30 billion (including assets of both subsidiaries and branches of the third‐country groups) ‐
Proposed 2019 implementation but subject to agreement
November 2018 now evolves: now 5 countries: US Virgin Islands, Samoa, American Samoa, Guam, Trinidad and Tobago.
Publication of Non‐cooperative jurisdictions by EU Commission
29 March 2019.UK Leaves the EU.
Many clients (particularly in FSO) are currently considering significant restructuring in advance of the UK formally leaving the EU. Many will need regulated operations to shift from the UK to other EU countries. The general position seems to be that transition is to be expected but institutions
cannot rely upon it. Likely details of transition will be agreed late in process.
Likely transition until 31 December 2020. Many tax rules (both at EU level and amongst Member States) hinge on the EU status of the companies involved (for example, cross‐border merger reliefs, interest and dividend withholding etc).Subject to transitional arrangements:• State aid rules may no longer apply to the UK.• EU fundamental freedoms such as freedom of establishment will no longer apply to the UK. There will also be obvious significant customs and VAT implications
Irelan
d
June 2017: Signing ceremony. 68
countries sign. More follow through 2017.
December 2017: US Tax Reform:
Tax Cuts and Jobs Act. Rate is lowered to 21%.
Irish Corporate Tax Reform
2018 + onwards. MLI enters into force for specific treaties 3 or 4 months after ratification in those states.
Likely 2019 and onwards. MLI begins to ‘take effect’ for relevant treaties. Exact dates depend on tax head applicable.
July 2018: MLI enters into force generally. Following
ratification by five countries.
February 2017: EU Commission writes to 92
jurisdictions in start of ‘screening’.
Proposed directive to take effect 1 January 2019. Major difference with OECD CBCR would be that the EU rules would require public disclosure.
1 July2020
December 2017: EU Commission publishes first list of 17 jurisdictions. Listed countries are
invited to ‘address deficiencies’.
01 January 2018, following key provisions become effective:--Interest limitation (163(j)) -Territorial system; one-time repatriation tax (Transition Tax, 965) -Introduction of Base Erosion and Anti-Abuse Tax (BEAT, 59A). -Denial of deduction for certain hybrid payments (267A). - GILTI – anti-deferral provision taxing global intangible low tax income
EU Mandatory Disclosure Rules,13 March 2018:
EU Council reach political agreement on the Mandatory Disclosure Directive.
25 June 2018:Reportable cross border arrangements where the first step of implementation occurs on/ after this
date will need to be reported.
EU Digital Services TaxMarch 2018:
EU Commission propose introduction of EU‐wide DST, on certain entities, at 3% of turnover.
31 August 2020: Reports under the Directive
due by 31 August 2020.
31 December 2019: Member States to translate Directive into national laws.
1 July 2020:Date of entry intoforce of the Directive.
Reportable transactions entered into between 25 June 2018 and 30 June 2020 due to be reported by 31 August 2020. Ongoing obligation for reportable transactions entered into from 1 July 2020 onwards.
10 October 2017: Minister for Finance opens consultation on
modernisation of the Irish corporate tax system. Closes 30 January 2018. Gives start dates for some
changes.
1 January 2019 implementation date:• CFC • Fully implement MLI (29 January 2019)
Sept/Oct 2018: ‘Road Map’ published.
Irish 2018 Finance Bill to be published Oct.
I January 2020: • Anti‐Hybrid mismatch rules
(Later for reverse‐hybrids)
• Updated TP rules• Mandatory Disclosure Rules• Interest limitation rules?
10 October 2018 – exit tax rules introduced.
Feb 2019 – Omnibus Brexit Bill –includes changes to tax rules (eg group
relief).
Proposed Regulations issued and if finalised on or before 22 June 2019 would have the following effective dates:• Section 163(j) Limitation on Interest Expense – not retroactive. Effective when regulations finalised; early adoption allowed if consistent and
entire. • Section 59A BEAT - taxable years beginning after 31 December 2017• Hybrid Arrangements - taxable years beginning after 31 December 2017 with exceptions for years beginning on or after 20 December 2018• GILTI - taxable years beginning after 31 December 2017(*Final rules on Transition Tax released 5 February 2019. Thus, applies to last tax year beginning before 1 Jan 2018, ).
December 2018: DST text proposed at Ecofin Council meeting on 4 December 2018 but no agreement. Ecofin Council continue to work on a
compromise text
Legislative Tax Update
Interest Limitation Rule
Limitation on the deduction of net borrowing costs (i.e. interest expense minus interest income) to 30% of the EBITDA
Consultation Update Impact
►Derogation sought to 2024 – “equally effective” domestic law as basis
►European Commission focused on ratio‐based approach
►Corporation Tax Roadmap points to potential early adoption of rules – 2020
►OECD could accelerate timeline if minimum standard agreed
►Public consultation to run in conjunction with hybrid mismatch process
►Applies to related party and third party debt arrangements
►Economically equivalent taxable revenues –key definition and no guidance available currently
►Application of exemptions or carve‐outs/grandfathering?
►Impact on shareholder debt financing structures – long term viability and value being achieved?
Base Rule
Legislative Tax Update
Transfer Pricing
Recommendations:
► Incorporate BEPS Actions 8‐10;
► Incorporate Master File, Local File requirements;
►Remove pre‐July 2010 grandfathering;
►Consider extending TP rules to:
i. SMEs
ii. Non‐trading income (which should include section 110 companies)
iii. Capital transactions
Timing: before end of 2020
The Coffey Report
What’s happening?
►Anticipated to be included in Finance Bill 2019 – Adopt 2017 OECD Transfer Pricing Guidelines which will incorporate DEMPE and master file, local file requirements
►DEMPE already being applied in practice by other jurisdictions
►2020 – Consultation process to commence on extension of TP rules to SMEs, non‐trading income and capital transactions
Legislative Tax Update
CFC Rules
CFC rules are an anti‐abuse measure, designed to prevent the diversion of profits to offshore entities in low or no tax jurisdictions.
►CFC rules aim to tax certain undistributed income of low taxed CFCs.
►Under ATAD provisions, Member States required to implement ATAD compliant CFC rules from 1 January 2019.
►Some optionality for Member States within ATAD:
Option A (Category of income approach) Option B (Significant people functions (SPFs) approach)
►CFC rules implemented for accounting periods beginning on or after 1 January 2019 (as part of wider implementation of ATAD). Specifics provided in the Finance Act 2018.
►Ireland adopted Option B approach.
►Anticipated guidance in early 2019.
Key Points
Irish Position
Base Rule
► Structures should be reviewed to determine impact.
► Irish SPVs may have subsidiaries which are CFC’s or alternatively Ireland could be a CFC of another company.
► Actual tax paid vs. headline rate.
► Additional compliance burden in assessing the rules and impact. Complexity in applying Irish rules to foreign subsidiaries.
► Revenue Guidance also important from a practical perspective.
Practical Impact
Legislative Tax Update
CFC Rules
Legislative Tax Update
MLI
Implementation Update FS Impact
►Ireland completed the ratification procedures on 29 January 2019.
►Irish tax treaties only updated after counter party also ratifies. Specific timing also varies dependent the type of treaty relief being claimed.
►Ratification process slowly moving forward as needs to be completed under each local country domestic laws.
►Limited practical application to date but changes will impact quickly in 2nd half of 2019 and through 2020.
►Important to monitor which countries have ratified and the timing of changes to specific treaties.
Base Rule
The MLI includes provisions for a minimum standard approach to combating treaty abuse, requiring tax treaties to include:
a Principal Purpose Test (“PPT”), or a PPT supplemented with a Limitation of Benefits (“LOB”) clause.
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Signature7 June 2017
Ratificationby 5 parties Entry into force
Domesticratification
3-4 months
Entry into forceA-B Tax Treaty
A-B Double Tax Treaty modified for
withholding tax
A-B Double Tax Treaty modified for all other
taxes
1st day of next calendar year
Taxable periods beginning at least 6 months after entry into force
Jurisdiction A signs and ratifies
Jurisdiction B signs and ratifies
A & B both deposit instrument to OECD
A-B Double Tax Treaty modified for MAP & Arbitration
MLI Implementation Timeline
Signed by Ireland & UK
Ratified in UK / Instrument deposited with OECD
Entry into forceEntry into effect for MAP /
Arbitration
1 May 2019June 2017 July 2018
Entry into effect for withholding tax
1 January 2020
Entry into effect for all other taxes
Taxable Periods beginning on/after 1 November 2019
29 January 2019
Ratified in Ireland/ Instrument deposited with
OECD
1 July 2018March 2018
Legislative Tax Update
Anti‐Hybrid Rules
Base Rule
The anti‐hybrid rules counter‐act double deduction or deduction without inclusion transactions, which arise due to hybrid mismatches. The rules must be implemented by 1 January 2020.
Applies to situations between:1. associated taxpayers in two or more jurisdictions; or2. structured arrangements between parties in two or more jurisdictions;that arise from differences in the characterisation of a financial instrument or entity resulting in:i. A double deduction (i.e. a deduction for the same payment, expense or loss in two
jurisdictions) – DD outcomeii. A deduction without inclusion (i.e. a payment that is deductible for tax purposes in the
payers jurisdiction but is not included in the taxable income of the receiving taxpayer) –D/NI outcome
Key Points
Deduction without InclusionIn case a hybrid mismatch results in deduction without inclusion:
►If the payer jurisdiction is a Member State, that Member State shall deny the deduction
Or
►If the payer jurisdiction is a third country that has not denied the deduction, the Member State that is the payee jurisdiction shall include the payment in its income
Double DeductionIn case a hybrid mismatch results in double deductions:
►If the investor jurisdiction is a Member State, that Member State shall deny the deduction
Or
►If the investor jurisdiction is a third country that has not denied the deduction, the Member State that is the payer jurisdiction shall deny the deduction
Hybrid financial instrument Hybrid entity Imported Mismatch Permanent Establishments
The tax treatment of a financial instrument differs between two jurisdictions.
A payment to or by an entity that is qualified as non‐transparent under the laws of one jurisdiction and qualified as transparent by another jurisdiction.
The effect of a hybrid mismatch between parties in third countries is shifted into the jurisdiction of a Member State through the use of a non‐hybrid instrument thereby undermining the effectiveness of the rules that neutralize hybrid mismatches. This includes a deductible payment in a Member State under a non‐hybrid instrument that is used to fund expenditure involving a hybrid mismatch.
Situations resulting in a deduction without inclusion due to differences in the allocation of payments between the head office and PE(s), payments to a disregarded PE and deemed payment between the head office and PE(s) whereby the payment is disregarded under the law of the payee jurisdiction.
Hybrid Transfers
Situations where an arrangement to transfer a financial instrument gives rise to a difference in tax treatment, if the underlying return of a financial instrument is treated as derived by more than one of the parties to the arrangement. As such, the payment could give rise to a deduction for the payer while being treated as a return on the underlying investment by the payee.
Legislative Tax Update
Anti‐Hybrid Rules
13
Hybrid financial instrumentImported Mismatch
Hybrid entity
Outcome: Deduction may be denied in Ireland.
Outcome: Deduction may be denied in
Luxembourg. If not, deduction may be denied in Ireland
Outcome: Deduction may be denied in Ireland
US Corp
Lux Finco
Irish AOE(Trading)
CPEC
Loan(Fixed)
NI
D
D
I
P & I
Non‐US
US LLC
Irish AOE(Trading)
NI
D
P & ILoan(Fixed)
Section IIO
US Taxable Investors
QDII or NI?
P & IPPN
D
Legislative Tax Update
Anti‐Hybrid Rules
Securitisation Transaction
PP
A,B,CNoteholders
S.110 Co(CI incorp. Irish tax
resident)
Irish AOE(Trading)
Loan(Fixed)
Irish AOE(Trading)
E Noteholders
Loan(Fixed)
PPN
Legislative Tax Update
Anti‐Hybrid Rules
Legislative Tax Update
Anti‐Hybrid Rules
Hybrid Risk Areas
US Taxables
S.110 Co(Issuer ‐ KY)
Irish AOE(Trading)
US Tax Exempts / Non‐US
KY LPFeeder
Irish AOE(Trading)
Irish AOE(Trading)
Irish AOE(Trading)
KY LPFeeder
KY LPFeeder
Company treated as a disregarded entity for US tax purposes
Partnership treated as a corporation for US tax purposes
E Note (PPN)(25%)
Particularly heavy reliance on intangible assets, including
intellectual property.
Reliance on intellectual property
Many evolving business models include elements of data, user participation,
user-generated content and network effects.
User participation and the value of data
Scale without mass
The ability to have a significant economic presence in a country
without a major physical presence.
Legislative Tax Update
Digital Services Tax
Three issues at the heart of the digital debate
11 12 13 14 15 16 17
1998
OECD report: Electronic Commerce Taxation Framework Conditions
2015
OECD final report on Action 1 published
2018
EuropeanCommission publishes proposals
2018
OECD publishes interim report
2019
OECD to publish interim
report to the G20
2020
EU Member States to apply provisions by 1 January (as currently drafted)
2020
OECD to publish final report to G20
13 February 2019: OECD consultation: “Addressing the
Tax Challenge of the Digitalisation of the Economy”
Legislative Tax Update
Digital Services Tax
The digital tax debate: a timeline of key events
1 A new, full-scope DST via unanimity in 2019
2 EU Member States vote for reduced scope, as suggested by France/Germany
3 A group of (nine or more) EU Member States move forward under the enhanced cooperation mechanism – DST components yet to be agreed
A group of EU Member States move forward with a set of measures that arelargely consistent in terms of their design, but outside of the Commission’s remit
EU Member States (and potentially others, such as Australia) who want a DST move forward with their own unilateral measures
4
5
Legislative Tax Update
Digital Services Tax
DST: Potential outcome scenariosFinish line approaching, or end of the first lap?
December
January 2019 | Austria | DST proposal
December 2018 | France | DST mentioned
June 2020 | Singapore | GST
October 2018 | Australia | DST consultation
October 2018 | UK | 2% DST proposed
August 2018 | Chile | 10% digital tax proposed
July 2019 | South Korea | 10% GST
December 2018 | Italy | DST replaces “Web Tax”
July 2018 | India | Comments sought SEP
DST
Indirect taxes
Digital PE concepts Note: This list is not exhaustive; it simply indicates some developments
February 2019 | New Zealand | DST consultation
October 2018 | Spain | DST proposed
February 2019 | Belgium | DST discussions
Legislative Tax Update
Digital Services Tax
What’s different today? Summary of current developments
EMEIA Parent
US Sub
US operating income
CFC(Non-US)
13.125% tax rate
(16.406% after 2025)
US FDII
10% return on tangible
assetsGILTI
Non-US affiliateBase erosion
payment BEAT
Subpart F income
21% tax rate
10.5%tax rate
(13.125% after 2025)
0%tax rate
21% tax rate
0% - 21% tax rate
Potential costs
Base erosion anti‐abuse tax (BEAT)
Section 163(j) earnings stripping rules
Anti‐hybrid provision
Global intangible low taxed income (GILTI)
Transition tax
Net operating loss limitations
Potential opportunities
21% corporate rate (plus state and local taxes)
Foreign derived intangible income (FDII)
100% immediate expensing of certain tangible assets
Limited participation exemption
Potential for realignment of non‐US subsidiaries
Legislative Tax Update
US Tax Reform
Overview of the key corporate provisions
Legislative Tax Update
Overview
US Persons
PE Investor (Lux) 30%
Parent(Germany)
FinCo(IRL)
Loan100%Services
Loan
FeeInterest
Borrowers
Interest
InterestLoan
Interest Limitation?Hybrid Mismatch?
CFC?
Transfer Pricing
Interest Limitation?Hybrid Mismatch
MLI?
CPEC
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Transfer Pricing
• Tax law generally requires taxable profits to be at least the amount of profits that would arise if all connected party transactions are conducted on an arm’s length basis
• Consequently, it is usually best to ensure the price actually paid under related party transactions is set to an arm’s length price
• Otherwise, adjustments to tax returns are needed, which can cause significant inefficiencies or costly disputes with and between tax authorities
Why Price at Arm’s Length
• The theory is really simple….….just set the price to be the same price that two independent parties would agree
• However, the practice can be much more difficult
• Firstly, careful consideration is needed to establish what the actual transaction is (‘delineation’):
• contractual terms between the connected parties
• actual conduct between the connected parties
• what unconnected parties might do
• need to consider perspective of both sides of transaction
Pricing Financial Instruments and Loans
• Once the transaction is delineated, establish how it should be priced based on its characteristics…all of them
• For example, when pricing a loan consider:
Pricing Financial Instruments and Loans
Size Term Payment Schedule Seniority
Location of Borrower Currency Collateral Currency
Guarantees Issue time Industry Factors
Group Strategy
Fixed or Variable Base Rate Purpose of
Loan Credit
Ratings
Status of Lender Listing Rating
AgencyLocal
Regulations
• Establishing an arm’s length price requires evidence of the pricing that exists for transactions between unconnected people, known as uncontrolled comparable price (‘CUP’s) method
• Finding CUP’s for financial instruments is typically easier than finding for other types of transactions
• However, finding an exact matching CUP is still unlikely. Therefore, necessary adjustments to a CUP can be needed
Pricing Financial Instruments and Loans
• Documentation is currently a legal requirement and the requirements are about to become more onerous
• To the extent possible, the transaction between related parties should be designed to reflect the transactions (including terms and conditions) that can be observed between independent enterprises
• To the extent possible, legal agreements should be in place which reflect the actual transaction in place
Documentation “Best Practices”
• Put in place a transfer pricing analysis document that includes:
• a detailed description of the transaction
• a functional analysis
• an economic analysis (including detailed consideration of why the chosen pricing method is considered appropriate)
• any contemporaneous observations on pricing unconnected transactions *
• For recurring transactions, detailed policies in relation to establishing pricing on an ongoing basis
Documentation “Best Practices”
Department of Finance Consultation
• Replace references to the OECD’s 2010 Transfer Pricing Guidelines to the OECD’s 2017 Guidelines
• Remove grandfathering of pre-July 2010 transactions
• Extend transfer pricing guidelines to SMEs
• Extend transfer pricing guidelines to non-trading and capital transactions
• Expand the requirements for documentation
• Apply transfer pricing to branches
Irish Law - What is coming down the tracks?Department of Finance Consultation
• Previously no specific guidance provided for pricing financial transactions
• Ongoing work under the OECD’s BEPS project
• Non-consensus draft for the moment and work is ongoing
• Nevertheless, content of the discussion draft serves as useful guidance for discussing transfer pricing aspects of financial transactions
Irish Law - What is coming down the tracks?OECD Discussion Draft
• The key themes include:
• Importance of accurate delineation of the actual transaction in advance of considering the pricing (e.g. loan or capital)
• Focus on both sides of the transaction and what arm’s length transactions are realistically possible
• Implicit group support
Irish Law - What is coming down the tracks?OECD Discussion Draft
• Specific guidance also provided for:
• Intra-group loans
• Cash pooling
• Hedging
• Guarantees
• Captive insurance
Irish Law - What is coming down the tracks?OECD Discussion Draft
The Tax / Treasury Partnership
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INVESTMENT
An effective tax strategy is one that is grounded in compliance, it is connected to the market conditions whilst being externally focused on the global tax environment and it is one that evolves with changing circumstances. REPATRIATION
GROWTH
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Corporate Treasury moves cash from A to B
Daily and permanently
Raises cash internationally
Competitive cost with correct maturities
Manages currency in pools not by geography
Corporate Treasury moves cash from A to B
Daily and permanently
Raises cash internationally
Competitive cost with correct maturities
Manages currency in pools not by geographies
Borders create tax obligations and risks
The corporate treasury and tax partnership is key to the execution and delivery of a business financing strategy required to support growth.
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Capital Allocation
CAPEX Investment Choices
Debt Management
Dividends and Repatriation
Acquisitions
Disciplined capital allocation supports business growth
Treasury Management Tax Headwinds
Headline rate is not the effective rate.
Interest restrictions
Capital investment expensing
Repatriation easier
EU ATAD, OECD, & BEPS driving tax base consolidation
Significant EBITDA based interest restrictions increases the after tax cost of funds
Double taxation is now routine in an international context
Controlled low taxed foreign affiliates
Tax fragmentation risks to normal cash pooling systems
Supply chain risks leading to working capital increases
Repatriation and dividend questions
Withholding tax and EU Directives
Renewed reliance on tax treaties
Elimination of hybrid
financing
30% EBITDA based interest
restrictions
Unilateral transfer pricing
adjustments
• Accepted, but it should not limit treasury financing options
• In some key locations, the level of Ireland’s headline rate has been debated
• Unilateral challenges
• More competent authority
• TP within countries
• More uncertainty and complexity
• Broadening the base without reducing the rate increases ETR and lowers ROCE
• Discriminates against smaller economies
• Risks to longstanding policy supporting outbound international expansion
Financing Costs
Treasury Management
Secure funding by diversifying financing sources
Risk management discipline creates competing tax treatments
• Maturity Profile
• Foreign currency
• Interest rates and pricing
Debt issuances in international bond markets
Daily cash management using cash pools creating TP debate
• Cash and debt are not mutually exclusive – its about liquidity management not tax arbitrage
• OECD paper on allocation of risks and rewards
• Fragmentation risk to cash pooling systems
Free movement of cash through repatriation
Funding diversification using asset backed securities from Ireland can be undermined with increased after tax costs
Treasury voice now more than ever needs to be heard in the external tax policy environment
Ireland Competitive Investment Landscape
Lower statutory rate – Broader Base
EU ATAD, OECD, & BEPS driving tax base consolidation
Counties lowering statutory rates on this broader base
Lower statutory rate – Broader Base
o The competitive attractiveness of a historic low tax policy in Ireland will likely be eroded by rules that may be more sustainable in larger less open economies as they narrow the effective tax rate gap with other countries
o The 12.5%/25% two rate system and the distinction between trading and non-trading creates complexity and uncertainty that is unique to Ireland
o European participation exemption facilitates a free movement of cash for Treasury from A to B
o FDI and indigenous investment are both impacted but not necessarily in equal measure
o There has never been a policy imperative to deny Irish corporates deductions to finance international expansion
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INVESTMENT An effective tax strategy is one that is grounded in compliance, it is connected to the market conditions whilst being externally focused on the global tax environment and it is one that evolves with changing circumstances.
Ireland has the opportunity to re-imagine its competitive offering to attract investment and facilitate substantive treasury operations here.
REPATRIATION
GROWTH
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