Michael Noonan says ‘brass-plate operations’ will not be welcome

Minister for Finance Michael Noonan has warned that "brass-plate operations" seeking to relocate to Ireland for tax purposes would not be welcome. He was responding to reports that the Central Bank had actively discouraged certain financial institutions from relocating here in the wake of Brexit on regulatory grounds.

“There are no restrictions but obviously we don’t want to take everything that comes,” he told reporters at the Department of Finance’s annual tax policy conference in Dublin. “We don’t want brass-plate operations that simply come here and screw a brass plate on to a door for tax advantages.”

“Ireland is in the business of attracting solid, operating investment,” he added, noting it was matter for the Central Bank to decide on the specific regulatory code by which firms operate.

Ireland is expected to be one of main beneficiaries of Brexit, with several large UK banks said to be eyeing the possibility of establishing a base here. News agency Reuters, however, reported yesterday that the Central Bank was “reluctant” to accommodate certain large-scale investment banks involved in advising and financing large corporations, given the regulatory oversight involved.

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Mr Noonan denied there was any difference between the Department of Finance’s approach to attracting business and the Central Bank’s policy. He said the Central Bank’s “messaging” to firms considering the possibility of moving to Ireland was not instructive but explanatory. He also said he did not believe US tax reform under the next president posed a risk to jobs and investment in Ireland.

He said the US treasury had already done a considerable amount of preparatory work on reforming the US corporate tax code and change was inevitable regardless of who had won the recent US presidential election. The reform was likely to involve a lower corporation tax rate and some type of arrangement for the repatriation of multinational profits.

President-elect Donald Trump has pledged to reduce US corporation tax from 35 per cent to 15 per cent as part of his "America first" economic plan.

On the threat to Ireland from lower corporation tax rates in the US and the UK, Mr Noonan said Ireland’s 12.5 per cent rate was now an established brand and the State had the advantage of offering businesses “certainty” that the rate would not be changed. On the planned changes to the Central Bank’s mortgage-lending rules, Mr Noonan said that was a matter the bank’s governor.