Ireland: 5, U.K.: 0
August 29, 2008
Yesterday we reported that the U.K. investment firm Henderson Group announced that it is reincorporating in Ireland to lower its overall tax bill. Henderson is the third U.K. firm to announce such a move this year.
However, the Telegraph is reporting that the engineering firm Charter and the office space management firm Regus have joined the exodus of British firms seeking a better tax climate:
Charter yesterday spelt out the reasons for its decision to quit the UK, highlighting the overseas nature of its business and the fact that it has made investments worth more than £100m in areas such as China, central Europe and South America.
The company said that by moving out of the UK, it would be able to “provide a suitable platform on which to develop and expand Charter’s businesses internationally and will lead to a lower overall tax rate and lower tax compliance costs than would be achievable if the ultimate parent company of the Charter Group were to remain in the United Kingdom.”
The common characteristic of these companies is that their international profits dwarf their domestic profits yet the British tax system taxes them on their worldwide profits at a rate of 28 percent. In Ireland by contrast, that same company would pay 12.5 percent on their worldwide profits.
For more on Ireland’s corporate tax system visit the home page of IDA Ireland.