Intel Executive: Ireland's Low Corporate Rate Is Big Advantage

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By Kevin A. Bell

March 14 — An Intel Corp. tax executive said Ireland's 12.5 percent company tax rate gives the Emerald Isle a huge advantage over the U.S. in attracting U.S. investment.

Ronald Dickel, vice president of global tax at Santa Clara, Calif.-based computer chip giant Intel, said the tax rate difference between the two nations is huge, which “encourages us to invest overseas.”

Dickel said if the U.S. were to significantly lower its 35 percent corporate tax rate, the differential with Ireland's 12.5 percent tax rate goes down “and we may be more likely to continue to invest in the U.S. rather than in Ireland.”

“Ireland gets it,” Dickel said. “They understand tax policy.” The man on the street appreciates the importance of the 12.5 percent rate because it attracts foreign investment which creates employment.

Dickel spoke March 10 at the Global Tax Policy Conference in Dublin, organized by the Ash Center for Democratic Governance and Innovation and the Irish Tax Institute.

Leixlip Campus

According to Intel Ireland's website, the company's Leixlip factory, located in County Kildare, began operations in 1989. Intel invested more than $12.5 billion to turn a former 360-acre stud farm into a factory manufacturing semiconductors. Currently, more than 4,500 employees fabricate semiconductor wafers and produce silicon microprocessors.

In March 2014, Intel announced a $5 billion upgrade to its Leixlip factory to enable it to manufacture Intel process technology on 300-millimeter wafers. It is the largest private-sector investment in the history of the Irish state.

Dickel told the Dublin conference that instead of the $5 billion it cost Intel to build the factory in Ireland it would have cost the company $6 billion to build the plant in the U.S. Most of the $1 billion differential “is attributable to lower tax rates that we can enjoy in Ireland.”

Thus, Ireland's low corporate tax rate was a very important factor in Intel deciding to build the factory in Ireland, he said.

Territorial System

Turning to the issue of international tax overhaul, Dickel said most of Intel's customers are overseas. “If you want to be able to sell your products overseas without incurring a great deal of taxes, you want to have a system that is a territorial system like the rest of the world, so that you are on a level playing field.”

It is also important to deal with the $2 trillion in unrepatriated earnings “and those are going to have to come back to the United States with some manner of tax, Do you tax the cash differently from the earnings in so-called brick and mortar that have already been reinvested?”

Dickel said multinational companies want to be able to move their capital from one subsidiary to another without incurring tax, and to ultimately bring it back to the U.S.

Most U.S. companies acknowledge that if the U.S. adopts a territorial system there will have to be “some kind of base erosion provision.” Companies are debating among themselves whether it is a minimum tax, or “our personal favorite, Camp Option C, which was the base erosion provision that was in Chairman Camp's H.R. 1.” Option C has a “stick for foreign earnings which is the base erosion provision, but it also has a carrot which encourages you to use your IP in the U.S. and sell your products abroad, and you get a lower tax rate for that.”

Dickel said that if the U.S. imposes a minimum tax on Intel's foreign earnings that also increases the costs of the company's factory in Ireland, but the company is able to bring the cash back to the U.S. without additional tax, “that may be a price that we are willing to pay.”

Intellectual Property Box

If the U.S. adopts an intellectual property box, Dickel said U.S. companies would return property to the U.S. “I think if you have an IP box with a suitably low tax rate, U.S. companies would migrate their IP back.”

Intel's IP is already in the U.S., he said. “But I think that other companies will bring it back.”

Dickel said although Intel has research and development sites around the world, the company has 75 percent of its R&D sites in the U.S. “So I do not think an IP box would increase that number, but it would work hard to hold that number.”

To contact the reporter on this story: Kevin A. Bell in Dublin at

To contact the editor responsible for this story: Molly Moses at