Despite receiving recognition by some industry observers as a tax haven after US lawmakers highlighted domestic tech companies' ability to avoid paying tax in billions of dollars, a report by Barry O'Dowd on VentureBeat said the country is not so. O'Dowd is investment agency IDA Ireland's vice president of emerging businesses.
A US Senate committee in May have called out companies who has operations in Ireland for avoiding tax payments simply on the basis that its Ireland-based headquarters is stateless as per tax terms.
O'Dowd argued that Organisation for Economic Co-operation and Development (OECD) itself had publicly reiterated that Ireland is and never has been a tax haven based from its four basic tests for qualifying as a tax haven. O'Dowd said in its report that Ireland did not even qualify in any one of the tests. Instead, its current 12.5% corporate tax rate is seen as an incentive for many existing and potential entrepreneurs in Ireland.
In his report, O'Dowd said Ireland's edge in obtaining foreign direct investment was because of its competitive in terms of establishing a tech startup. He said aside from the tax rate, Ireland has the lowest median population age in the EU at 35, which translates to a younger workforce which has the capacities to adopt sector trends more easily than other counterparts. Moreover, Ireland is said to have a higher university graduate percentage as compared to the averages of US, UK and the OECD.
Founder and chief executive Sam Chandler U.S.-based document productivity and workflow solutions provider seconded O'Dowd's points, who said, "The most important factor for Nitro in our evaluation of potential EMEA HQ locations was access to strong local talent and Ireland was the frontrunner from the outset."
Survey technology platform Qualtrics has set up headquarters in Ireland a month before Nitro, and Chief executive Ryan Smith thinks Ireland's young and intelligent workforce is an attractive feature.
O'dowd also said that Ireland has been capitalizing on its domestic initiatives to grow growth in the country through its Government Strategy for Science Technology and Innovation. Thanks to the government of Ireland investment of €8 billion to research and development initiatives, O'Dowd said it signaled the country's dedication to stay ahead of the tech curve, and in essence attracted major players like Facebook and Google, aside from potential investors to establish offices in the country.
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