DUBLIN ATTRACTING MOST RELOCATING BRITISH COMPANIES - Dublin has attracted 25% of all Brexit-related company moves so far, pitching it ahead of close competitors Paris, Frankfurt and Amsterdam.
However, as a new survey reveals, while it might be the "winner" when it comes to winning projects, transfers from London to Dublin have been "modest in scale" with no signs of a "Brexodus" - or, at least, not yet. In a survey of company moves since the 2016 referendum, property group Knight Frank has found that Dublin is the clear winner when it comes to UK companies looking for an EU hub, accounting for a quarter of all Brexit-related moves since then, ahead of Luxembourg, Frankfurt and Paris, says the Irish Times. Ireland is out in front in the new project win stakes, attracting 48 projects to Dublin and two to Cork, ahead of Luxembourg (39), Paris (24) and Frankfurt/Munich/Berlin (29). Some of the companies to choose Dublin include JP Morgan, Barclays, Morgan Stanley, Equilend, Beazley, Royal London Group, Odgers Berndtson and DLA Piper. "While Brexit is set to represent a negative shock to the Irish economy as a whole, the Dublin office market is one of the few areas that stands to benefit due to relocation activity from London," the report notes, adding that the city appeals for its cultural proximity to London, and its attractive regulatory and fiscal framework. It says that "the largest positive impact" for the Dublin office market will be in the tech sector, with "Brexit offering the opportunity for the city to further enhance its reputation as a global tech hub".
NEW MULTINATIONAL EXIT TAX 'NOT TIT-FOR-TAT MEASURE AGAINST US' - Finance Minister Paschal Donohoe has said that his surprise decision to introduce an exit tax for multinationals (MNCs) is not a retaliatory strike against sweeping changes to the US tax code that are aimed at luring foreign intellectual property and services back to America.
The new exit tax, which has already been passed by the Dáil, will tax unrealised capital gains at 12.5% where companies migrate residence or transfer assets offshore. The 12.5% rate was widely seen as a disincentive to US-based MNCs to repatriate intellectual property to the US to take advantage of the special new 13.125% federal tax rate on foreign derived intangible income (FDII). However Mr Donohoe, speaking yesterday at Independent News & Media's Budget 2019 Breakfast Briefing, said that he introduced the tax a year ahead of an EU wide anti-tax avoidance deadline, to ensure that Ireland was in compliance with the OECD's Base Erosion and Profit Shifting (Beps) process. "In terms of messages I'm sending out… it is absolutely not my intention to be sending out a signal to any other country in relation to our tax code," said Mr Donohoe. "The reason why we picked the 12.5% rate is because the anchor that many other jurisdictions use in relation to determining their exit tax rate, is their corporate tax rate. So for most other EU countries that we look at, their exit tax rate is consistent with their corporation tax rate. That is what we have done." The new exit tax regime, which is not expected to yield any revenue in its first year of operation, is a mandatory, Europe-wide measure - pursuant to the European Union's Anti-Tax Avoidance Directive (ATAD).
'GOOD GROWTH' IN RETAIL SALES AT BOOTS IN THE REPUBLIC - The US owner of Boots pharmacies in Ireland rated growth in sales in the Republic as "good" but gave no new details about whether it was mulling further expansion to its 86 outlets in the Republic and 84 stores in the North.
Boots chemists are part of the Retail Pharmacy International division of the US stock market-listed Walgreens Boots Alliance giant, says the Irish Examiner. Growth in sales in Boots in the Republic was "good" in the three months to the end of August, said Walgreens, even as fourth-quarter sales across its Retail Pharmacy International division fell 1.9% from a year earlier, to $2.9 billion (€2.5 billion), dragged down by Boots UK, "where the beauty category declined in a challenging market". "Excluding the UK, comparable retail sales rose 1.1%, with good growth in the Republic of Ireland and Thailand," it said. It didn't comment on the sales performance of Boots in the North where it employs 1,600.
JAPANESE GROUP JOINS RUSH FOR UK EXIT AFTER TAX AMNESTY SIGNALS FROM TOKYO - Japanese companies are stepping up plans to move businesses out of the UK, on the premise that their country's tax authorities have granted a temporary amnesty on cross-border mergers between Britain and other EU countries ahead of Brexit.
The tax waiver presumption, which has triggered a rush of inquiries to tax consultants and legal experts in Tokyo and London, has arisen from last month’s announcement by Panasonic that it will move its European headquarters from the UK to the Netherlands. The announcement was the first by a Japanese non-financial company citing Brexit uncertainty as the motivation. It came amid complaints from Japan's powerful Keidanren business federation that the UK has been unable to offer a coherent message on the future business environment. On Thursday, Daiwa became the latest Japanese bank to reveal plans to move trading operations to Frankfurt from London. Daiwa Capital Markets Deutschland, as the new subsidiary is known, is the bank’s primary EU hub, backed with its own specific pool of capital and complete with 25 transferred or locally hired staff. The bank still employs about 450 people in the securities business in London. Daiwa's move follows that of fellow Japanese lender Nomura, which has set up a licensed trading hub in Frankfurt and is in advanced talks with French regulators about using Paris as a post-Brexit European lending entity.