A SPOKESPERSON FOR the Department of Finance has reacted negatively to the announcement by the world’s biggest meat company to move its parent company and €30 billion in assets to Ireland.
The spokesperson told the international news agency AFP, that “Ireland does not encourage such transactions”.
He also dismissed the idea that the move would mean jobs and investment for the country:
Ireland does not encourage the location of brass-plate operations. We only have and want real substantive Foreign Direct Investment – the kind that brings real jobs and investment into Ireland.
Brazilian company JBS will not be availing of the Irish corporate tax rate of 12.5%. Its headquarters will reside in the UK, where funds for the newly-created Irish company, JBS Foods International, will be managed.
Irish economist Jim Power branded the move “a total joke” that would bring further unwelcome scrutiny of Ireland’s corporation tax.
The bottom line is that this is the sort of business Ireland should be running a mile from. The government should be working harder to prevent deals such as this; they are bad news for Ireland.
It is also unclear what effect the €30 billion transfer will have on Ireland’s economic growth data, as inflows as a result of several corporate inversion deals has already skewed Irish economic growth statistics.
Just months ago, the Central Statistics Office announced a national growth of 26.3% for 2015, which exceeded projections of 6.8%, as well as all of China’s annual growth rates since 1989, which left people ridiculing the figure as “leprechaun economics”.
Corporate tax rate
The ministry spokesman also said Ireland was working with other countries to address concerns over so-called “inversions”, which allow multinationals to channel profits through low-tax jurisdictions, as it did not have the power to prevent such deals unilaterally.
“The Irish government has made clear that we would welcome any changes made by the other administrations to address inversions,” he said.
Ireland’s low corporate tax rate is frequently criticised by other EU member states, and pressure is mounting to bring the rate closer to the European average of 18.6%. However, Ireland also relies heavily on multinationals for job creation and investment in local areas.
The plans announced this month by JBS will reportedly see more than €30 billion worth of its assets being shifted to Ireland on paper. The announcement was made by JBS to the US Securities and Exchange Commission (SEC).
Last year, JBS bought Northern Ireland-based poultry producer Moy Park for $1.5 billion.
With additional reporting from Gráinne Ní Aodha.
Correction: A previous version of this article incorrectly said JBS was moving its headquarters to Ireland. The company is in fact moving its parent company to Ireland.
To embed this post, copy the code below on your site
have your say