World's Largest Beef Producer Is the Latest Irish Inversion
DUBLIN—Brazil's JBS, the world's biggest meat company, has said it will move its headquarters to Ireland but Irish officials reacted dismissively to the announcement on Wednesday, saying it would not bring jobs and investment.
The plans announced this month by JBS, which will reportedly see more than 30 billion euros' ($34 billion) worth of its assets being shifted to Ireland on paper, make it the latest to take advantage of Ireland's favorable corporate tax rate.
"Ireland does not encourage such transactions. Ireland does not encourage the location of brass-plate operations," an Irish finance ministry spokesman told AFP.
"We only have and want real substantive FDI (Foreign Direct Investment) -- the kind that brings real jobs and investment into Ireland," he said.
Like several multinationals drawn to low-tax Ireland, the funds for the newly-created JBS Foods International will be managed abroad -- Britain in this case.
The announcement was made by JBS to the US Securities and Exchange Commission (SEC) last week.
The ministry spokesman said Ireland was working with other countries to address concerns over so-called "inversions", which allow multinationals to channel profits through low-tax jurisdictions, as it did not have the power to prevent such deals unilaterally.
"The Irish government has made clear that we would welcome any changes made by the other administrations to address inversions," he said.
Irish economist Jim Power branded the move "a total joke" that would bring further unwelcome scrutiny of Ireland’s 12.5% corporation tax.
"The bottom line is that this is the sort of business Ireland should be running a mile from -- the government should be working harder to prevent deals such as this; they are bad news for Ireland.”
It is also unclear what effect the 30 billion-euro transfer will have on Ireland’s economic growth data.
When the country’s Central Statistics Office announced growth of 26.3 percent for 2015 -- skewed by inflows as a result of several corporate inversion deals -- the figure was widely ridiculed as "leprechaun economics."
Ireland's low corporate tax rate is frequently criticized by other EU member states but the government has worked to close tax loopholes.
The country hosts the European headquarters of US tech giants including Google and Facebook.
JBS last year bought Northern Ireland-based poultry producer Moy Park for $1.5 billion.
JBS is the world's biggest beef producer.
Copyright Agence-France Presse, 2016
