DROPBOX TO BILL MORE THAN 300 MILLION USERS VIA IRELAND - Dropbox, the US-based file-hosting service, has told its 300 million-plus users it will bill most of them by way of its international operations centre in Dublin.
The move means income from all customers outside the US, Canada and Mexico - about 70% of the customer base - will be booked in Ireland where the corporation tax, at 12.5%, is significantly lower than most of the jurisdictions from which any income will flow. the move will bring back into focus the controversial role played by Ireland in the tax affairs of US multinationals, writes the Irish Times. A source close to the company said Dropbox would not be routing its income offshore via Ireland, as has been the case with companies such as Google, Apple, and Microsoft. Dropbox announced in 2012 it was opening its international operations centre in Dublin. Dropbox Ireland now has 100 employees. Last week Dropbox emailed its customers and said those living outside North America would get their service via Dropbox Ireland from June 1st, 2015. Most of the shares in Dropbox Ireland are owned by Dropbox in the US, although one share is owned by Dropbox Bermuda.
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CENTRAL BANK SPENDS €300,000 ON SECURITY AT FORMER ANGLO SITE - The Central Bank has paid a security firm almost €300,000, to date, to secure the site of the ill-fated former Anglo Irish Bank building on Dublin's North Wall Quay. The Central Bank purchased the half-completed building, which was due to become Anglo's next headquarters, but instead became an international symbol for Ireland's economic collapse, for €8m in November 2012, says the Irish Examiner. Last month, the Central Bank confirmed Walls Construction had secured the €68.7m contract as the main contractor, beating off competition from five other firms, and work has commenced on the scheme. The overall cost of the project is estimated at around €140m. Now, the Central Bank has confirmed that it has spent €16.2m on the project to date; including the €8m purchase price. The bank anticipates that its 1,400 staff will move into the building in late 2016. Security firm, Netwatch, has been paid €289,892 for 'site security services' with architectural firm, Henry J Lyons receiving €2m for architect and construction advisory fees. In addition, Lisney has received €153,750 for 'estate agent services', with McCann Fitzgerald receiving €678,993 on legal services around the project.
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BUSINESS SENTIMENT HITS EIGHT-YEAR HIGH AS SERVICES AND MANUFACTURING RISE - Irish business sentiment has reached its highest levels in eight years as confidence in the economy continues to improve, according to a new study. Almost two-thirds of companies surveyed for the KBC Bank Ireland/ Chartered Accountants Ireland Business Sentiment Index reported an increase in business activity for the first quarter of the year while 27% reported no change. The results for the first quarter of the year were the strongest recorded since the inception of the survey eight and a half years ago, says the Irish Independent. Respondents were also positive on the wider state of the country, with 70% feeling optimistic while just 3% were pessimistic. However 10% of companies did record a dip in their level of business over the three month period. This was up from 7% the previous quarter. The main areas in which weaker conditions were identified were the property and consumer-focused industries. This was picked up on in the report, which noted that "the turn in consumer spending is still quite uneven". KBC Bank Ireland's chief economist, Austin Hughes, cautioned businesses not to get carried away with the scale of the recovery. "What we are seeing is a solid step up, rather than a soaring, of output. The idea that everything is absolutely wonderful is not true," he said.
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CHRISTINE LAGARDE CALLS FOR SHAKE-UP OF BANKERS' PAY - Banks need to shake up bonus-heavy pay structures and attack corporate cultures that encourage excessive short-term risk-taking, the head of the International Monetary Fund has warned. Christine Lagarde, IMF managing director, said much had been done on the regulatory front since the 2008 global financial crisis to crack down on banks and bankers and avoid a repeat of the turmoil. But she warned, in a Washington speech, that risks to financial stability were still elevated and the “culture” of the financial sector was at least partly to blame. The Financial Times writes that the IMF chief said pay practices were needed to encourage the long-term performance of banks and other companies rather than short-term gains. Shareholders also needed to be given a bigger say on pay, while banks should have the power to claw back pay and bonuses in the event of misconduct or changes in performance, she added. More also still needed to be done to improve internal risk management structures, she said, citing the case of JPMorgan’s “London Whale” where a trader at the bank ran up $6 billion in losses. In that case “financial risks were either ignored or underestimated . . . Failure happened at both the management and board levels".
