TAX PLAN MAY UNDERMINE US INVESTMENT IN IRELAND - US President Barack Obama has proposed changes to the American corporation tax regime that could work against the attractiveness of Ireland for foreign direct investment, says the Irish Times. Mr Obama has proposed the imposition of a minimum tax on US companies' foreign earnings as part of an effort to reduce incentives in the international tax system for US companies to shift income and investment overseas. However, the proposals released yesterday did not state what the minimum tax rate should be. Changes to the corporation tax regime have become a political issue in the US but no changes are expected until well into next year, at the earliest. The corporation tax rate in the US is 35%, one of the highest rates in the developed world. Ireland's low rate of 12.5% has played a key role in attracting US companies to set up substantial operations here. At present, US subsidiaries based in Ireland do not have to pay the difference between Irish corporation tax rate and the US rate, as long as they don't repatriate their after-tax profits.
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HUGE WINDFALL FOR CRAVEN AND NOLAN AS SHELL SET TO BUY €1.2 BILLION COVE ENERGY - Irish oil veterans John Craven and Michael Nolan are set to share a windfall worth tens of millions of euros after Royal Dutch Shell made an agreed £992m (€1.2 billion) bid for Dublin-based Cove Energy, writes the Irish Independent. Mozambique-focused Cove's senior management said yesterday they would recommend to shareholders. Together, they own around 5% of the company in shares and stock options, which means they are set to share around €45m. The agreement, which has yet to be approved by shareholders, is a triumph for Belfast-educated Mr Craven, who is known to many Dublin investors as the founder of Algeria-focused Petroceltic. Many investors have followed Mr Craven and now stand to make a return from Cove, which has seen its share price rise 70% so far this year. Cove's main asset is an 8.5% stake in an off-shore field in Mozambique, where operator Anadarko has found more than 30 trillion cubic feet of natural gas. Japan's Mitsui and Indian groups Bharat Petroleum and Videocon also own stakes in the license. Mr Craven will share the proceeds from the sale with finance director Michael Nolan, who once headed Dublin-based mining company Minmet, and industry veteran Michael Blaha.
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GERMANS REVIVE GREEK MARSHALL PLAN IDEA - Two leading Germans, including the head of the country's manufacturers' association, have revived the call for a new Marshall Plan to be launched to reanimate the Greek economy, involving both private and public investment. The Financial Time says that Hans-Peter Keitel, president of the Federation of German Industries, said the Greek population needed to have the prospect of a "new future", on top of all the sacrifices they were being asked to make in exchange for debt relief. German investors were ready to put money into practical projects to revive the economy, he said, but Greece first needed to create a reliable legal framework to protect their investments. The same concept of a Marshall Plan - a reference to the US-financed programme that revived European economies after the second world war - was proposed by Werner Hoyer, former deputy German foreign minister, who has just taken over as president of the European Investment Bank. "Greece needs a Marshall Plan alongside its unavoidable savings programme," he said in an interview with Handelsblatt, a business newspaper. "Only that can succeed in renewing the structures of the country from the bottom up."
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BAA MAKES A LOSS AS DEBT PAYMENTS MOUNT - The airport operator BAA has announced a pre-tax loss of £256m for 2011, despite record traffic at Heathrow and a leap in revenues, says the Guardian. BAA said it had delivered a strong operational year with continued significant investment that would ultimately see it turn a profit, although interest payments on its £10bn debt continued to drag its annual accounts into the red. Colin Matthews, chief executive of BAA, stressed a continuing improvement in customer satisfaction. He said: "Passengers say Heathrow is getting better. Our punctuality is the best in a decade, passenger ratings are up in total, and particularly for transfers and on security waiting time. "And we had more passengers, who spent more freely in our retail and car parks." He said BAA had made almost £900m of investment in Heathrow over the year, mainly in the building of Terminal 2, which will handle 20 million passengers a year after it opens in 2014.
