OFFICIALS EXAMINE 6.25% RATE FOR NEW 'KNOWLEDGE BOX' SCHEME - Irish officials are examining the feasibility of a 6.25% rate on a new corporate tax scheme as the Government moves to shore up inward investment after its decision to scrap the controversial “Double Irish” mechanism. While this is one of several options under discussion, such a rate would apply to a new “knowledge box” scheme in which a preferential rate would be levied on assets such as patents which are managed from Ireland and located here, writes the Irish Times. Minister for Finance Michael Noonan said in the budget on Tuesday that he was initiating a public consultation on the development of such a scheme in anticipation that it could be introduced in the Finance Bill next year. A 6.25% tax rate on intellectual property assets managed in the “knowledge box” scheme would be half the standard Irish corporate tax rate of 12.5%, which itself has been a source of international controversy. Government officials briefed multinational investors on the plan on a conference call on Wednesday in which they set out the rationale for the decision to eliminate the “Double Irish”, a contentious measure that plays on differences between Irish law and the law in offshore jurisdictions to help multinationals minimise their tax burden. A business figure who received a report on the call said no mention was made of the tax rates which might apply to the Irish “knowledge box”.
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PROFITS AT DISCOUNT RETAILER ALDI SOAR BY 65% TO €327m IN UK AND IRISH MARKETS - Supermarket giant Aldi last year continued to enjoy exponential growth in Ireland and the UK as its pre-tax profits rose by 65% to £260.89m (€327.2m). Accounts for the German-owned Aldi Stores Ltd just posted to the Companies' Office show that the retailer enjoyed the sharp jump in profits after revenues soared by more than £1.38 billion or 36% from £3.89 billion to £5.27 billion in 2013, reports the Irish Independent. Aldi, which opened its first supermarket in Ireland in 1999, now has more than 100 stores in the country and continues to expand. The latest data from Kantar Worldpanel shows that Aldi increased its market share of the Irish supermarket sector to 8.3%. Aldi has been the fastest- growing supermarket in Ireland since the middle of 2008 with the company tripling its annual spend on Irish-sourced products in the past five years, helping to maintain 20,000 jobs across the food industry. Last year, Aldi opened its 100th store in Ireland at Callan, Co Kilkenny, and announced plans to create a further 300 jobs with 20 new stores. Aldi, which does not disclose its sales or profits in Ireland, increased its operating profits by 68% in Ireland and the UK from £172m to £271m.
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WARNING OVER HIKE IN ENERGY PRICES - Irish consumers could be hit with significantly higher energy prices as a result of a single European electricity market, a leading economic thinktank has warned. In a newly published research paper on EU proposals for an integrated European electricity market, among all member states, the Economic and Social Research Institute (ESRI) said that while the proposals could result in greater trade, "it could come at the cost of significantly higher prices in the domestic market". While the institute didn’t place an actual figure on its outlook, it said current proposals could lead to an increase of a few percentage points in average bills, says the Irish Examiner. Full single-market integration has been moved out until 2016, but the problem felt by many - including the ESRI - lies not in the idea of a single market, per se, but in the complex new energy trading rules each member state needs to adhere to, which in many cases will bring about a complete change to the workings of their electricity markets. To that end, the ESRI is calling on Government to appeal to the EU for a change to the proposed rules and to formulate an alternative policy plan. "The correct approach is to delay making a decision and, in conjunction with the EU, to seek to identify a more appropriate model that will be likely to benefit consumers in Ireland and elsewhere in the EU," said ESRI research professor John FitzGerald, who said research backed up the theory that the new system doesn’t benefit Ireland.
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GOOGLE OVERTAKES GOLDMAN SACHS IN US POLITICAL DONATIONS - Google has surpassed Goldman Sachs as a US political donor in a sign of Silicon Valley’s increasingly assertive efforts to shape policy and counter critical scrutiny in Washington. Google’s political action committee, NetPAC, has spent more money on political campaigns this year than Goldman, at $1.43m, just edging out the $1.4m by the bank that is famous for its political connections. That is a marked change from the last midterm election in 2010, when Google spent only a third as much as Goldman, writes the Financial Times. Technology companies are spending big money this year to build political support as Washington debates issues critical to the sector from tax, to increasing the number of visas for skilled migrants to greater oversight of US intelligence agencies. While people working in the technology sector typically lean left, tech companies in the latest political cycle are increasingly donating more to Republicans or splitting their giving equally between the two parties. In 2010, Democratic federal candidates received 55% of tech PAC contributions, while Republicans received 45%, according to data from the Center for Responsive Politics. In 2014, as the right looks to solidify its control of the House of Representatives and possibly take control of the Senate, Democrats received 48% to the Republicans’ 52%.
