ACC International Legal Affairs Committee

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ACC International Legal Affairs Committee Legal
Quick Hit Corporate Migration Why Are So Many
Companies Choosing Ireland? Presented by
Ailish Finnerty (Tax Partner) Arthur Cox -
Ireland May 13, 2010
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Why Corporate Migration?

• Perceived US tax policy shift against off-shore
  tax havens
• Move towards top holding company in tax treaty
  jurisdiction

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Why Ireland

• Low corporate tax rate (12.5) on trading profits
  and trading dividends
• EU member, euro () zone member and English
  speaking
• Extensive double tax treaty network
• Common law jurisdiction similar to the USA
• Generous incentives available for investment
• Highly developed legal, tax, economic and
  financial infrastructure and well-educated labour
  force

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Effecting the Migration

• Incorporate a new parent company in Ireland
• Share for share exchange
• Cancellation scheme of arrangement
• Merge an EEA company into an Irish company
• Convert an EU company into a Societas European
  (S.E.) and move its corporate seat to Ireland
• Migrate the tax residence of an existing company
  to Ireland

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Tax Issues - Residence

• General Test Central Management and Control in
  Ireland
• Board of Directors
• Strategic Decision-Making

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Tax Issues - Dividends

• Payment by Irish Resident Company
• Dividend Withholding Tax _at_ 20
• Various Exemptions
• EU/DTT residents not under control of persons
  not so resident or shares in recipient/parent
  traded on SE in EU/DTT
• Income Access Shares
• ADR exemption
• Receipt by Irish Resident Company
• Taxable _at_ 25 or _at_ 12½ if trading dividends with
  credit for withholding tax / underlying tax

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Other Tax Issues

• Stamp duty on share transfers of 1
• ADR exemption
• No thin capitalisation rules
• No controlled foreign corporation / sub-part F
  rules
• Generally no capital gains tax on sale of shares
  by non-resident (and exemption for disposal of
  5 shares in a company part of a trading group
  and resident in EU/DTT)
• Limited transfer pricing rules

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Conclusion

• Migrated HQ to Ireland
• - Accenture - Cooper Industries
• - Covidien - Ingersoll-Rand
• Warner-Chilcott - Willis
• James Hardie - TBS Shipping
• Charter plc - Shire Pharmaceuticals
• Experian

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For further details, please contactAilish
FinnertyPartner, Arthur CoxTelephone 353 1
618 0561(direct)Fax [phone]Email
Ailish.Finnerty_at_arthurcox.com