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article imageObama blasts companies moving overseas for taxation purposes

By Ryan Hite     Jul 25, 2014 in Business
Dublin - In his toughest comments yet on the subject, Barack Obama accused big US corporations of trying to manipulate “the system” by “magically becoming Irish” through tax inversion deals.
“I don't care if it's legal, it's wrong,” Obama stated. “It sticks you for the tab to make up for what they're stashing offshore.”
There has been a plethora of such deals in recent months which have seen big American companies become “Irish” for tax purposes through buying smaller firms registered there. The same trend is happening in the rest of Europe as well.
Fears America is losing out on taxes have made the deals controversial.
Obama singled Ireland out, which is certain to set off alarm bells in government circles.
“If you are basically still an American company but you simply change your mailing address in order to avoid paying taxes then you are really not doing right by the country and its people,” he stated in an interview with CNBC before he spoke at a technical college in Los Angeles.
“If you simply acquire a company in Ireland or some other country to take advantage of the low tax rate, you start saying we are now magically an Irish company despite the fact that you may only have a hundred employees there and you've got 10,000 in the United States; you are just gaming the system. You are an American company, you continue to benefit in all kinds of ways from being an American company,” he further said.
Recent multi-billion dollar deals by US firms for smaller Irish companies show the scale of activity.
In the first six months of 2014, it helped drive the value of Irish mergers to new records.
Critics say such deals have little to do with what is really happening in the Irish economy and the US Economy.
The same trend is being seen in the UK and Switzerland, prompting fears the US is losing vital tax revenues from large corporations moving their headquarters overseas.
More about tax eversion, Taxes, us firms overseas, overseas tax rates
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