Multinational management consultancy Accenture is receiving tax relief on the $7bn (€5.4bn) it spent building up a portfolio of intellectual property rights.
Accenture, headquartered in Grand Canal Dock in Dublin, incorporated in Ireland in Sept 2009 and in doing so moved its intellectual property rights from Luxembourg to Ireland through a share exchange.
Clients include some of the biggest companies in Ireland, Microsoft, Pfizer, Kerry Group, and AIB as well as major branches of the Government including, An Garda Síochána, Revenue, and the Department of Justice.
A spokesperson said Accenture pays full taxes in Ireland, but refused to comment further. “Accenture moved its incorporation to Ireland and pays full taxes under Irish law on all of our Irish operations.”
A briefing document from solicitors Arthur Cox says that firms in Ireland can reduce their tax rate to as low as 2.5% by moving their intellectual property portfolios to Ireland.
“There are numerous advantages for multinational companies with large intellectual property portfolios who locate and manage these portfolios in Ireland. The effective corporation tax rate can be reduced to as low as 2.5% for Irish companies whose trade involves the exploitation of intellectual property.”
The Arthur Cox document, ‘Uses of Ireland for German Companies’, states: “A well-known global company recently moved the ownership and exploitation of an intellectual property portfolio worth approximately $7bn to Ireland.”
A spokesperson for the IDA said firms in Ireland can take advantage of tax relief in acquiring intellectual property rights similar to tax relief available on the purchase of machinery.
“There are capital allowances available for the acquisition costs associated with the acquisition of intellectual property. The capital allowances available for the acquisition of intangible assets are similar to the capital allowances available for the acquisition of physical assets, such as industrial buildings and plant and machinery,” the IDA said.
A report on Accenture’s intellectual property portfolio was brought to the attention of Finance Minister Micheal Noonan by Sinn Féin’s finance spokes-person Pearse Doherty in a parliamentary question.
Mr Noonan said he was precluded from commenting on any particular firm’s tax affairs but added that allow-ances for “intangible assets” were designed to encourage companies.
“Allowances apply to expenditure on a broad range of assets (eg patents, copyright, trademarks, know-how) that are recognised as intangible assets under generally accepted accounting practice,” Mr Noonan said.
“The allowances, in providing relief for this expenditure, are intended to encourage companies to manage and develop the intellectual assets of their business.”
Revenue said the exchequer had foregone €19.3m in tax due to intangible assets in 2010, the most recent year that figures were available. Revenue said 118 companies had claimed under the scheme.
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