Ireland-bound Eaton in Cooper buyout to save on taxes

American energy company Eaton’s decision to buy Cooper Industries and place the combined company’s headquarters in Cooper’s Irish home instead of Eaton’s Cleveland, will save $160m (€125m) a year in taxes by 2016, the firms have said.

The move, announced yesterday, underscores the tax disincentives for multinational firms organised in the US, said Gary Clyde Hufbauer of the Peterson Institute for International Economics in Washington. “The US tax system just invites this,” he said. “Any tax adviser in his right mind for this kind of thing would suggest: Locate the new company abroad.”

The US has the industrialised world’s highest statutory corporate tax rate at 35%.