Opportunities on horizon as tax laws evolve

Opportunities on horizon as tax laws evolve
Icon of US-Irish relations: The sculpture of Annie Moore in Cobh, Co Cork. Picture: Denis Scannell

Caroline O’Driscoll of Deloitte reflects on the depth of US-Irish ties.

Cork woman, Annie Moore, left Cobh on December 20, 1891 and became the first immigrant to be registered at the new immigration centre on Ellis Island, New York.

Today, according to the US Census Bureau, 33 million Americans self-identify as having Irish ancestry. That’s over 10% of the total population.

Ireland has always done well to attract USA investment – the record of the IDA is astounding in this regard.

Our 12.5% rate of corporation tax and attractive R&D tax credit regime has been the cornerstone of our economic policy and it has served us well.

Tax is a competitive business with our competitor countries looking to have a piece of our success. Have no doubt about that.

We cannot take anything for granted. The international tax winds are changing and the debate is becoming more nuanced.

There is a strong focus at OECD level on the taxation of digital business models and how profits are sliced and diced across countries.

These potential rules seek to tax such profits based on where their customers are based, not where the company is headquartered.

We are a small open export economy with a small domestic market.

Caroline O'Driscoll
Caroline O'Driscoll

Any rules like this could well impact corporate tax receipts in Ireland.

While we should fully participate in the debate, we must carefully assess the impact that any changes would have on us.

However, there is more than one “T” — talent, track record and ability to capitalise on technology innovation will be fundamental to attracting new business into Ireland.

Our 2020 Deloitte TMT predictions report and it strikes me how rapid, relentless and exciting technology change is.

5G will spark productivity gains with more than 100 companies globally testing private 5G deployments in 2020.

Electricity will put the wheels on cycling with 130 million e-bikes set to be sold worldwide in the next three years. Almost one million robots will be sold worldwide for enterprise use this year.

We also predict growth in the smartphone multiplier market (hardware, content, services from ringtones to apps) driving €420 billion revenue this year alone.

Of course, smartphone giant Apple, has a significant presence in Cork, reminding us that our connection with the USA runs deep.

Apple started its presence in Cork with just 60 people and is now home to 6,000 employees. That is some track record.

Reflecting on the recent visit of Tim Cook to Ireland, I was struck by his comment “we chose Cork to be our first operation outside Cupertino and our gateway to our European customers for good reason.

It sits at a geopolitical, economic and cultural crossroads, where the winds of innovation and opportunity blow freely.

Ultimately it is people who drive innovation, who put their hands up, who put forward ideas. It is people who rise; it is people who fall; it is people behind any success.

That is why so many USA companies come to Cork and expand operations here – talent, drive, innovation and opportunity.

The tech sector is now the largest sector in Cork, having exploded by over 60% in the last five years.

Cork plays strongly in cloud, data analytics, IoT and significant innovation in the pharma and food sector enabled through technology.

Cork has been ranked as one of the Top 25 European Cities of the Future. How cool is that?

Where else in the world can you work with a tech giant, drink Barry’s Tea and visit a blue flag beach all in one morning?

You see Cork is not just a great place to live a life.

It is a great place to call home.

  • Caroline O’Driscoll is a corporate and international partner with Deloitte Ireland, specialising in the technology sector. She is based in Cork.

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