Ireland has built its record as being one of the EU’s largest recipients of foreign direct investment on its attractive headline corporate tax rate of 12.5 per cent, but Mr Lohan is the confident that the rise to 15 per cent in January for all companies that generate $750 million or more in annual revenues is “not making a marked difference in terms of investment decisions”.
A second tranche of tax reforms called Pillar One, which are being overseen by the Paris-based OECD, would result in a portion of taxable profits generated by large multinationals being reassigned from Ireland to other markets. The change reflects how modern businesses can make profits in foreign markets without necessarily having a physical presence there.
Ireland-based life science companies have tripled R&D spending, as they undertake higher value activities, including manufacturing of complex biologic medicines. Since December, the pace of investment has picked up, with Eli Lilly, Pfizer and AstraZeneca ploughing more than $2 billion into manufacturing plants in Ireland, which is one of the world’s largest exporters of medicines.
Takeda is one of several life sciences companies which collaborate with Ireland’s National Institute for Bioprocessing Research and Training , an academic centre that provides training and research aimed at expanding the biopharma manufacturing industry. Initial Irish investments by Pfizer and Bristol Myers Squibb more than a half century ago encouraged other multinationals to follow, he said. Ireland is now a manufacturing centre for some of the world’s top-selling drugs, including MSD’s cancer therapy Keytruda and Pfizer’s Covid-19 vaccine.