CAMPAIGNS
Global corporate tax rules to change
 

New proposals under the OECD’s BEPS reform process could have significant implications for future corporation tax policies.


 

 

 

By Gerard Brady, Chief Economist

 

New proposals by the OECD / G20 on global tax reform, published at the end of May 2019, if implemented would represent the most fundamental change in global corporate tax policy in over a century.

 

This is not a statement Ibec makes lightly. But there is now concern that one of the proposals for a minimum effective global corporate tax rate could pose significant challenges for Ireland’s Foreign Direct Investment (FDI) model.

 

How did we get here and what exactly lies ahead for Ireland?

 

The BEPS process began in 2013 with the first BEPS package agreed in 2015. Over 115 countries and jurisdictions have now joined the process. So far changes have been implemented in 83 countries and 1,400 tax treaties through a multilateral instrument. Many of the measures at a European and Irish level are part of the EU's Anti-Tax Avoidance Directive and will take effect from 2019 onward into the early 2020s.

 

The work at OECD/G20 level is not complete, however. There is now clear renewed political momentum behind global multilateral tax reform through the process known colloquially as BEPS2.

 

The recent publication of the BEPS2 roadmap from the OECD/G20 is a significant step. It focuses on the allocation of tax bases between countries and a potential for a global minimum effective corporate tax rate. Both will be significant for Ireland from an industrial policy standpoint. These proposals, if adopted, would take effect over the course of the next decade. Agreement will require a majority and some countries may implement the proposals unilaterally if there is no agreement in Paris. In contrast to previous efforts at global tax reform these most recent proposals have strong political backing from all major countries including the US, Germany, and China. Ireland has no veto.

 

Proposals under Pillar 1 will mean some re-allocation of taxing rights to larger importing countries and, as a small exporting country, may mean the Irish exchequer will lose a proportion of its corporate tax base.

 

Irish business, however, is more concerned about proposals under Pillar 2 which would introduce a minimum effective corporate tax rate globally. It is crucial for small open economies that this rate, if introduced, is set at a level which focuses on addressing actual profit shifting concerns and does not infringe on our right to set competitive tax rates. These proposals are gaining significant momentum amongst the G20 and many of our traditional allies on tax issues.

 

Ibec, as the only Irish representative at BIAC (Business at the OECD), will continue to voice Irish business interests on these issues. Although we are early in the process, it is now highly likely that significant change is coming to how companies are taxed globally.

 

The Irish Government will need to react proactively by significantly strengthening other areas of our FDI regime. This will require significant investments in areas such as education, innovation, and quality of life which we have failed to make over recent years.

 

Pictured is Secretary General of the OECD, Angel Gurria, speaking at an Ibec event in March 2018.

 

Elections: Business needs a voice
 

With the European elections over, the focus of Ibec’s campaign activity is responding in light of developments in Dublin, Brussels and London.


 

 

By Arnold Dillon, Head of Strategic Campaigns

 

With the European elections over, the focus of Ibec’s campaign activity is shifting in light of developments in Brussels, London and Dublin. In Brussels, the European institutions are going through a process of renewal. We now have a new Parliament, but the European Commission will also change soon, along with the leadership of the Council. In London, a Tory leadership contest is raising the risk of a ‘no deal’ Brexit. While at home, our attention turns to October’s Budget 2020, with the possibility of a General Election never far away.

 

Brussels: All change in Brussels with key roles up for grabs

The outcome of the European elections has disrupted established political alliances, but did not prompt a shift to the political extremes that many feared. Read our full analysis here. The European People’s Party (EPP), where Fine Gael sit, and the Socialists and Democrats (S&D) have been in coalition since 1979, but will now have to seek new partners after losing ground. The Greens and the liberal alliances ALDE (just renamed Renew Europe) will have more sway. Over the coming weeks, Ibec will be sitting down with our new MEPs to discuss the priorities of Irish business in details. Ensuring strong Irish voices on key Committee is vital. Our focus also turns to the next European Commission, where the process of choosing a new President in underway. We have set out our key priorities for the future of Europe, and will ensure that Irish business interests are strongly represented in the EU-wide debate.

 

Dublin: Focus on Budget 2020, but eye to General Election

At home, the focus is moving towards the autumn budget. The possibility of a snap general election has receded somewhat, although nothing is certain.

Early next month, Ibec will set out our priorities for Budget 2020. The macroeconomic backdrop remains benign - no other economy in Western Europe had greater momentum coming into 2019.

However, a ‘no deal’ Brexit would significantly re-frame the economic outlook, and involve a major sterling depreciation, cancelled investment, falling consumer confidence, rising prices and significant trade disruption.

At the same time, changes to international tax rules may demand a significant domestic policy response. We will set out our detailed plans on how government should respond next month.

 

London: Tory rhetoric puts Brexit ‘no deal’ in spotlight

The failure of the UK government to ratify the Withdrawal Agreement, has left business with the complex task and enormous cost of managing the uncertainty of moving Brexit deadlines. Millions of euro has already been spent putting in place costly contingency plans. The Tory leadership contest is polarising opinions further, and is increasing the likelihood of a ‘no deal’ outcome. There is no sign of a break-through, and the imminent arrival of a ‘Brexiteer’ UK Prime Minister is unlikely to change that.

The objectives of Irish business have not changed: an orderly exit with a long transition, legal safeguards to protect the Good Friday Agreement and all-island economy, and close future EU-UK alignment.  In the meantime, our work to support you as you put in place contingency plans continues - get in touch directly or visit our dedicated Brexit website for support. 

 

The other boom: podcasting
 

Listen to leading international and national experts offer insights and knowledge relevant to business.


 

 

By Siobhán Masterson, Head of Corporate Affairs

 

Each year in excess of 100,000 people pass through the doors of Ibec’s head office in Dublin to attend thousands of meetings. Among our guests are expert speakers and business leaders – both domestic and international – who work across the spectrum of the global economy.

 

At Ibec, we want to ensure that all of our members and stakeholders can share in the insights and knowledge offered by our guests – even when you cannot attend in person.

 

The Ibec Podcast is a series of timely interviews with a mix of external speakers and in-house Ibec policy experts. In these interviews, we hope to capture the essence of the most pressing issues and challenges facing business.

 

The podcasting platform is fast becoming the choice of C suite professionals and consumers globally. Global monthly podcast listenership is projected to rise six-fold to 1.85 billion in 2023, according to the London-based research company Ovum.

 

The Ibec Podcast featured four new interviews in the current quarter, which are listed below. In addition, Ibec will in the coming months launch a new series of podcasts for Budget 2020. We hope you enjoy them and find them insightful.

 

  1. Podcast title: Better Balance for Better Business

What is on the 'to do' list to improve gender equality in business? Frances Fitzgerald TD, Anne Heraty CEO, Cpl Resources and Dr. Kara McGann join this special International Women's Day podcast to discuss dealing with everyday sexism and flexibility in the workplace.  

 

  1. Podcast title: Ireland's economic sweet spot - Ibec Economic Outlook Q1 2019

Gerard Brady talks through Ibec's Quarterly economic outlook for Q1. The economy is in a sweet spot right now but can this pace of growth last?

 

  1. Podcast title: The rise of dual career couples, with Jennifer Petriglieri

Jennifer Petriglieri, Professor of Organisational Behaviour at INSEAD Business School, joins us to give insights into one of the biggest emerging trends among contemporary talent pools – the rise of dual career couples. She is pictured above with Siobhan Masterson, Head of Corporate Affairs at Ibec. 

 

  1. Podcast title: Building A Low Carbon Economy

In a major new report, Ibec outlines a vision for 2050 that would see Ireland have a smart, low carbon economy known for its sustainable enterprise base, industrial competitiveness, energy resilience, skilled workforce and high quality of life. Guests include David Mc Redmond (An Post), Juan Aguiriano (Kerry Group), and Brian O'Gallachoir (MaREI centre).

Why third level education pays for itself
 

Research shows high returns on investment in universities and why Ireland needs a new funding model.


 

By Tony Donohoe, Head of Education and Social Policy

 

Research carried out by Indecon on behalf of the Irish Universities Association (IUA) has revealed that Ireland’s seven universities contribute a total of €8.9 billion to the economy, reinforcing the case for adequate investment in the sector.

 

Commenting on the research, Tony Donohoe, Ibec head of education policy and a member of the IUA report steering group, said: “The third level funding deficit is an invisible crisis that has already damaged our international reputation to attract research and business investment and is silently eroding our competitive edge. The Indecon report provides a compelling case for the Government and the Oireachtas to prioritise the reform of the funding model. It also shows that more State investment in university education isn’t just the right thing to do, it’s the profitable thing to do.”

 

The report shows that:

  • There has been a significant increase in the number of students enrolling for a university education which correlates with the demand for more highly skilled employees in the Irish economy. In 2017, over 120,000 students enrolled, up 50% from 2000.
  • There is a cumulative net gain to the Exchequer of €1,606 million in net present value terms based on the lifetime net earnings projections for the 2017 – 2018 cohort of new entrants to the seven universities. 
  • University graduates generate an income premium significantly beyond those with no third level education and have consistently lower unemployment rates, even during the recession years.
  • The average lifetime net premium for an undergraduate degree holder is €106,000 compared to a UK premium of £88,000 for graduates from the prestigious Russell Group Universities. Master’s Degree holders’ net premium rises to €146,000 and PhDs’ to €222,000. These figures are net of tax and factor in the costs incurred by students in obtaining their degrees and income foregone during their years at university.
  • Irish universities make a total research impact of €1.5 billion to the economy. This breaks down into €632 million from direct research expenditure, €373 million spill-over impact of university-based research on the wider economy, and €526 million from indirect and induced effects.
  • In 2017 – 2018 there were 16,701 full-time International students living in Ireland. Indecon estimated that the total annual export income generated for the Irish economy from international students at €386 million.

Pictured at the launch of the Indecon report were (from left): Alan Gray, Managing Director, Indecon; Professor Prof. Brian MacCraith, President of DCU and Chairman of the Irish Universities Association; Cathal Curry, Marketing, Innovation and Technology student, DCU; Dion Davis, Masters in Education Student, UCC; and Tony Donohoe, Head of Education and Social Policy, Ibec.

SECTORS
Financial services sets new 2025 goal
 

How Ireland can build scale to become a leading hub in the global financial services sector. 


 

 

By Paul Sweetman, Director Financial Services Ireland

 

Ireland is now the 4th largest exporter of financial services in the EU. We service over €4.2 trillion worth of assets under administration. 11 of the top 15 insurance companies have a presence in Ireland, 17 of the top 20 global banks are based here and 14 of the top 15 global aircraft lessors operate from Ireland. The industry here employs over 70,000 people.

 

This is no accident. These impressive figures represent hard work, a pursuit of excellence, high-calibre global leadership, deep generational talent and, a competitive drive to succeed for customers and clients. However, Ireland is not alone. Despite these impressive figures, we find ourselves at a crossroads with further untapped potential.

 

According to the Global Financial Centres Index, Dublin is ranked 38th globally as a financial services centre. The World Economic Forum’s Global Competitiveness Index ranks Ireland 37th on its Financial Systems Pillar.

 

As part of a renewed drive for the decade ahead, Financial Services Ireland (FSI) has set a new objective that by 2025, Ireland will be a top 20 global financial services centre. Success would represent an almost 50% improvement on where we stand right now.

 

How do we get there? To underpin our principle objective - to be a top 20 global financial services centre by 2025 - FSI has identified five goals we must achieve:

 

Goal 1: Ireland is the strongest business environment and best location to tackle future challenges for the sector.

 

Goal 2: We are the preeminent global location for diversity, inclusion and culture.

 

Goal 3: Ireland is a global leader for talent, skills and cultivating apprenticeships in financial services companies.

 

Goal 4: We are a world-class location for sustainable finance.

 

Goal 5: Ireland is the global centre for technology and financial services integration, innovation and leadership.

 

 

Pictured is Paul Sweetman, Director of Financial Services Ireland, the Ibec group that represents the sector, and Michael D'Arcy TD, Minister of State at the Department of Finance and the Department of Public Expenditure and Reform.

 

BioPharma industry outlines strategy
 

As BioPharmChem Ireland celebrates 25 years in business, the group maps out a new five-year path to further growth for the industry.


 

 

 

By Matt Moran, Director BioPharmaChem Ireland

 

 

Ireland is a recognised global leader in biopharma manufacturing. Each of the top 10 global biopharma companies has operations in Ireland with the sector employing over 30,000 people, with a similar number indirectly employed. The sector has invested in excess of €10 billion in Irish manufacturing facilities over the last decade.

 

BioPharmaChem Ireland (BPCI), the Ibec group that represents biopharmaceutical and chemical manufacturing industry in Ireland, celebrates 25 years in existence in 2019. When BPCI was founded in 1994, the industry had annual exports of just €6 billion. Today, annual exports exceed €73 billion, and the industry is by far the largest exporting segment of the Irish economy.

 

But no industry can stand still and so BPCI has launched a new five-year strategy for the period 2019-2023. The new strategy document, ‘Ireland – the Global BioPharmaChem Location of Choice’.  

 

The phenomenal growth of the sector to date has been achieved by world class companies who focus on innovation and deliver new and improved products. The next phase of development will include the digitisation of manufacturing and advanced therapeutics.

BPCI’s new strategy has five themes for the period 2019 – 2013.

 

  1. Industrial policy – 12.5% corporation tax; 25% R&D tax credit; and capital allowances for advanced manufacturing.
  2. Clusters – design a national framework; align academia and cluster needs; develop support services.
  3. Infrastructure – invest in advance therapeutic research infrastructure, fund Regulatory Science Ireland; develop Clinical Research Ireland.
  4. Innovation – make Ireland a global leader in ATMP; enhanced data analytics of manufacturing, supply chain and patient; BioPharma 4.0.
  5. Talent – attract global talent; industry-ready graduates; apprenticeships. 


BPCI is conscious that we must avoid complacency and so it is important to galvanise key stakeholders and continue to drive the industry forward. Our new strategy document provides a roadmap to help the industry in Ireland continue on its journey of growth and development.

 

 

Pictured at the launch of the guide are Minister for Business, Enterprise and Innovation, Heather Humphreys TD, Director of BioPharmaChem Ireland, Matt Moran and BPCI Chair Patricia Quane, VP and General Manager, Astellas Ireland. 

EVENTS
Ibec in images
 

In May, Ibec launched a major new report, Building a competitive low carbon economy – An Irish business roadmap to 2050’. In the report, Ibec outlines a vision for Ireland in 2050.

 

At the launch, we were delighted to get the insights of Juan Aguiriano, Group Head Sustainability, Kerry Group; Leisha Daly, Senior Director Government Affairs, Supply Chain EMEA & J&J Ireland at Johnson & Johnson; and David McRedmond, CEO An Post. 

 

Climate change is the single greatest challenge faced by humankind today. As part of a wider global response, Ireland needs to play its part by taking decisive action to decouple emissions from population and economic growth, and to transition to a competitive low carbon economy. 

 

Conor Minogue, Ibec Senior Executive-Infrastructure, Energy and Environment, addressed delegates at the launch of the major new report. 

This major new report is the latest component of Ibec's campaign, Better Lives, Better Business, that aims to make Ireland a better place to live and work. To explore the campaign further, head to Ibec's dedicated website

We were delighted to host Scotland's First Minister Nicola Sturgeon in our Dublin office recently. The engagement provided a great opportunity to re-emphasise Ireland and Scotland's shared economic interests, and examine how we can protect and build on them.

 

The First Minister is pictured with Ibec CEO Danny McCoy and Ibec President Paraic Curtis.

The First Minister of Scotland, Nicola Sturgeon, pictured engaging with Ibec members at the group's head office in Dublin. 

Throughout May, Ibec engaged in a European Parliament election campaign that introduced key business priorities into the political debate and promoted wider stakeholder engagement on EU issues. We hosted a series of debates with the leading MEP candidates in Cork, Dublin and Galway. 

 

Throughout the month, we had a dramatic change to the look of the Dublin office. The key campaign messages and images featured on a large wrap of the building, which provided a striking visual representation of Ibec’s campaign. 

"Local businesses, not central government, are the primary source of income for local authorities. Business contributions directly account for €1.51 billion or 35% of total local government budget. As both an employer and contributor to economic growth, business has a massive stake in how local government works."

 

Last month, we launched our Local Elections 2019 campaign, encouraging Irish business to go out and have their voices heard.

 

Pictured at the launch are Fergal O'Brien, Ibec Director of Policy and Public Affairs; Lavinia Ryan-Duggan, Vhi Healthcare Corporate Business Manager; Aodh Quinlivan, Director of the Centre for Local and Regional Governance (CLRG) at University College Cork; and Maureen Walsh, Managing Director DeCare Dental Insurance Ireland. 

"Growth brings opportunities, but also challenges. How Ireland manages this growth will have implications for the decades ahead as more people seek employment and enjoy good living standards in a workplace undergoing significant change."

 

Ibec Director of Employer Relations, Maeve McElwee, addresses delegates at the International Labour Organisation's (ILO) international labour conference in Geneva, Switzerland. 

In May, we welcomed Jennifer Petriglieri, Assistant Professor of Organisational Behaviour at INSEAD to Dublin, for a special joint event with AIB to mark 'Better Balance for Better Business'. 

 

Professor Petriglieri provided fascinating insights into the latest trends emerging in the global labour market force, including the rise of dual career couples. You can hear more from her research through her interview on the Ibec Podcast.

 

Pictured are Kate O Sullivan, VP Corporate Affairs, Virgin Media; Orla Benson, Consultant, SMBC Aviation Capital; Jennifer Petriglieri, INSEAD; and Simone Macleod-Nairn, Executive Director, Head Of HR And Corporate Resources At Irish Life.

Pictured at the Ibec-AIB event are Robert Mulhall, Managing Director of Consumer Banking AIB; Jennifer Petriglieri, Assistant Professor of Organisational Behaviour at INSEAD; and Ibec CEO, Danny McCoy. 

The Ibec KeepWell Summit took place in Croke Park in early June. Over 300 businesses who were in attendance at this flagship event. Attendees heard from industry leaders the means by which they can embed health and wellbeing into their corporate cultures in a way that enhances the mental, social and physical wellbeing and productivity of all employees.

 

Pictured are Ibec Director of Member Services, Sharon Higgins; best-selling author of "Better" and conference speaker, John Grant; KeepWell Mark, Senior Account Executive, Sophie Moran; and rugby commentator, mental health advocate and event MC, Brent Pope. 

The keynote address of the Ibec KeepWell Summit 2019 came from renowned international rugby union referee, Nigel Owens. 

The Irish Medtech Association was proud to support the Republic of Ireland Powerchair team in their recent European Powerchair Championship in Finland. The team performed brilliantly, defeating one of the pre-tournament favourites Denmark to place third overall and take home the bronze medal!

 

Pictured are Sinead Keogh, Director of the Irish Medtech Association; Emer O’Sullivan, Team Captain for the Republic of Ireland; John Moore, Head Coach; and Donal Byrne, Secretary, Association of Irish Powerchair football (AIPF).

Ibec was delighted to host Ann Johnson, Corporate VP of Cybersecurity at Microsoft, for a special briefing on the technological dynamics that are shaping the new world of work and both the opportunities and threats they bring to the business community.

 

She is pictured in conversation with Ibec COO/Deputy CEO, Liam O'Donoghue. 

 

The Public Relations Institute of Ireland recently held a special briefing in conjunction with Trinity College Dublin's Department of Political Science, that explored perspectives of lobbying regulation in Ireland. 

 

As Ireland’s largest lobbying organisation and its number one business lobby, Ibec has advocated for and supported lobbying reform, including the introduction of the Lobbying Act in 2015.

 

Pictured from left to right are: Lorraine Higgins, Director of Strategy and Public Policy, MKC Communications; Sherry Perreault, Head of Ethics and Lobbying Regulation, Lobbying,ie; Clodagh Bergin, Senior Account Executive, Edelman; Jacqueline Hall, Senior Adviser at Kreab Worldwide; Dr. Martina Byrne,Chief Executive PRII and PRCA; Professor Raj Chari, Political Science at Trinity College Dublin; Siobhan Masterson, Head of Corporate Affairs, Ibec; and Michele Crepaz, Postdoctoral Research Fellow at Trinity College Dublin. 

 

Financial Services Ireland welcomed Minister of State at the Department of Finance and the Department of Public Expenditure and Reform, Michael D'Arcy T.D. to Ibec, to take part in a round-table session discussing the new 'Ireland: Financial services powerhouse' strategy.

 

It is FSI's objective that Ireland becomes a top 20 global financial centre by 2025. The new strategy document lays the foundation to achieve this objective.

 

The Minister is pictured with Paul Sweetman, Director of Financial Services Ireland. 

Retail Ireland, the Ibec group that represents the sector, recently held its Annual Lunch in the Marker Hotel, Dublin, in which guests heard of the emerging trends in the sector from industry experts. 

 

Pictured are Retail Ireland Director, Tom Burke; BWG Foods MD and outgoing chair of Retail Ireland, Willie O'Byrne; Cate Trotter, Head of Trends at Insider Trends; and Brian Donaldson, Group General Manager of Maxol Group and incoming Chair of Retail Ireland.

Ibec CEO Danny McCoy recently gave an address at the opening of Trinity College Dublin's new Business School building.

 

In his speech, he outlined how Ireland's future success will be underpinned by talented & educated people and that facilities such as this business school will be a great contributor to this ambition.

 

He is pictured alongside Carolyn Fairbairn, Director-General of the Confederation of British Industry (CBI) and Paul Drechsler, Vice-President of CBI. 

Property industry conference 2019
 

This year's Property Industry Ireland conference will take place on the morning of Friday, 21 June 2019 in the Marker Hotel in Dublin. 

 

In common with our previous annual conferences, the event will bring together the leaders in the Irish property and construction industry to address the main concerns facing housing, commercial, industrial and retail real estate in Ireland.

 

The main theme for this year’s conference is innovation in the property sector and will feature high-level international and Irish speakers. In an environment where there is a squeeze on capacity and where skill availability is challenging, but demand for commercial and residential property continues to outstrip demand, we look at how the property industry can respond through new and innovative techniques, technologies and ways to operate.

 

To register your interest in attending, click here. Spaces subject to availability. 

Webinar Summer Series
 

 

Join us for the Ibec Webinar Summer Series as our experts provide your organisation with insights, analysis and advice on a wide range of business issues such as Employer Relations, Occupational Health & Safety, Economic outlook and Member Services topics.

 

Booking is essential for these webinars so to register your interest in any of our upcoming editions, click here.

President's Dinner 2019
 

 

Ibec’s most prestigious event, the Ibec President’s Dinner celebrates the annual handover of the Ibec Presidency. Running for over 25 years, this event is attended by more than 800 senior industry leaders representing organisations from across all key sectors of the economy. With Cabinet members and Ireland's leading businesses in attendance, it is always an unmissable evening. 

 

The event will take place on Friday, 27th September 2019 in the RDS, Dublin. This year will mark the outgoing Ibec President, Paraic Curtis of TE Medical, TE Connectivity and welcomes in the new Ibec President, Pat McCann of Dalata Hotel Group.

 

This event sells out rapidly annually, so for queries on booking your place, please email; events@ibec.ie

Please note that dress code is Black Tie.

FEATURES
Welcome Message

 

Dear member,

 

Acting on the climate change agenda is the one of the most important challenges facing business. The Green Wave in the recent EU elections suggests there is growing popular support for putting our economy on a more sustainable footing.

 

Given the urgency of the environmental threat, we need decisive action. At Ibec, we want to support Ireland in transitioning to a smart, low carbon and competitive economy by 2050. Done correctly, a transition presents a no-regrets opportunity to build a better Ireland.

 

We are delighted with the response and feedback to our recently launched new report, Building a competitive low carbon economy and we encourage members to engage with our policy team in moving towards next steps.

 

Danny McCoy

CEO