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Big investment hubs dodge a bullet in global tax overhaul – Financial Post

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DUBLIN — Ireland may have done the once unthinkable by giving up its prized 12.5% corporate tax rate in a global shakeup but it and other developed nations appear set to continue dividing up the spoils of foreign direct investment.

Some 136 countries on Friday agreed the first major overhaul in a generation of the rules for taxing multinationals, with measures including a global minimum rate of 15% intended to discourage them from booking profits in low tax countries.

Ireland’s dropping of its opposition on the eve of the deal handed efforts a major boost. But many developing countries say their interests have been sidelined, while charity Oxfam called the agreement “a rich country stitch-up.”

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“We will continue to compete with largely the same jurisdictions,” said Martin Shanahan, the head of IDA Ireland, the state investment agency that has convinced the likes of Apple, Facebook, and Pfizer to set up European headquarters in the country of just 5 million people.

Adding future technology giants to that list is still likely to mean going up against Berlin and London. For pharmaceuticals and medical devices, the toughest competition will come from Switzerland and Singapore.

Shanahan has also pointed to Spain and parts of Eastern Europe in recent years as increasingly competitive in the race for multinational investments that directly account for one in six Irish jobs.

“SHAMEFUL” DEAL

Many of those competitor countries have corporate tax rates well above Ireland’s current 12.5% and the incoming 15% global minimum. Dublin has long argued that it takes more than just low taxes to attract investment, pointing to Ireland’s young, highly educated workforce and European Union membership.

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Announcing the opening of a new European headquarters in Dublin this week, U.S. online gifting platform Sendoso said corporate tax was a very small factor and that the global deal did not change Ireland’s strategic advantages of as a location.

The head of Ireland’s National Treasury Management Agency said on Thursday that digital payments giant Stripe had never brought up tax when discussing rapid hiring plans in Ireland. The Irish sovereign wealth fund, which the NTMA manages, invested in the U.S. startup’s latest funding round in March.

Nevertheless, low tax countries could have suffered a far worse outcome. The United States, which led the recent charge to strike a deal, initially wanted a 21% minimum rate and the draft OECD agreement struck in July settled on “at least 15%.”

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Dublin lobbied hard to remove the “at least.” On succeeding, the government said it had maintained the stable business environment required to compete for investment.

“If we had a rate of ‘at least’ 15%, it would have created a lot of uncertainty about the attractiveness of our regime and that could have limited new investment and even a potential outflow of existing investment,” said Peter Vale, a tax partner at Grant Thornton in Ireland.

“We played a strong hand and I think it’s ended well.”

The effective preservation of the status quo – albeit with multinationals coughing up more of their profits – has angered developing countries that see few gains.

Argentine Economy Minister Martin Guzman said on Thursday the proposals forced developing countries to chose between “something bad and something worse.” Argentina had reluctantly signed up to the previous version of the deal.

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“It is shameful that the legitimate concerns of developing countries are being ignored while countries like low-tax Ireland are able to water down the already limited aspects of the deal,” Oxfam’s Tax Policy Lead Susana Ruiz said in a statement.

“The proposal for a fixed global rate of 15% will overwhelmingly benefit rich countries and increase inequality.”

Ireland knows how long it takes to catch up. As recently as 1980, when Apple founder Steve Jobs arrived to open its first plant outside the United States, Ireland was one of the poorest countries in Europe, with a jobless rate heading towards 17%.

“We opened up the economy in the 1950s and prior to that we were probably inward-looking, protectionist and poor,” IDA Ireland’s Shanahan said, looking even further back.

“It takes a long time to build up the capability and the offering.” (Reporting by Padraic Halpin; Editing by Catherine Evans)

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Kelowna investment banker fined | Business | pentictonherald.ca – pentictonherald.ca

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A Kelowna investment portfolio manager had inadequate compliance systems, record-keeping, and financial reporting, an investigation has found.

Kilburn Ogilvie Waymann Investment Management Ltd. has paid $55,700 to the B.C. Securities Commission in a settlement agreement for not managing business-associated risks and not providing reasonable assurance that it complied with securities legislation.

“Despite the deficiencies, there is no evidence that any clients were harmed,” the BCSC stated in Monday release.

As part of the firm’s settlement agreement with the BCSC, it must retain an independent compliance consultant for two years.

During a 2019 field investigation, BCSC staff found various problems with Kilburn Ogilvie Waymann Investment Management Ltd. These included:

– making unsubstantiated marketing claims

– not maintaining records capable of generating certain account activity reports

– inaccurately calculating its excess working capital

– producing deficient audited financial statements

The company’s chief compliance officer also failed to adequately perform his duties, the BCSC says.

The company’s website shows two employees, Trevor Kilburn, based in Kelowna, and John Waymann, based in Toronto. Between them, they have more than 75 years of combined investing experience, the website says.

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Doug Ford promises ‘huge’ investment in Windsor, Ont., auto plant after shift cuts – Global News

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TECUMSEH, Ont. — Ontario Premier Doug Ford says the province and federal governments will be making a “huge” investment in a Windsor, Ont., auto assembly plant to help ramp up production after the company announced a shift cut.

Stellantis, formerly known as Fiat Chrysler Automobiles, announced last week that it will cut its Windsor Assembly Plant down to one shift next spring in a move that will mean about 1,800 lost jobs.

The company says the move comes as the automotive industry faces significant headwinds including the semiconductor shortage and the effects of COVID-19.

Read more:
Feds fund initiative to develop electric and energy-efficient vehicles with McMaster

The cut from two shifts comes after Stellantis cut the third shift at the minivan plant in 2020 at a loss of about 1,500 jobs.

Ford, speaking near Windsor on Monday, says he wants to see three shifts again at the plant, and he will be speaking with Stellantis leadership on Tuesday.

The premier was not able to offer details on the investment, but said between both levels of government it’s “hundreds of millions” of dollars.

Stellantis has reaffirmed its commitment in a 2020 collective agreement with the local Unifor union to spend upwards of $1.5 billion at the plant.

The Windsor plant produces the Chrysler Pacifica, Chrysler Voyager and Chrysler Grand Caravan.

Ford also spoke of his interest in having a battery facility in Windsor.

“We have all the natural resources, we have the lithium, we have the nickel, we have the cobalt, folks, everything is here,” he said.

“We don’t need to bring these batteries in from overseas. We have everything here. On top of that we have the best workforce anywhere in the world … Any people out there that are listening that want to expand in Ontario, especially the battery business, we’ll be at your front doorstep and we’ll be ready to make a deal with you.”

© 2021 The Canadian Press

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Boris Johnson Says UK Doesn't Want to Turn Away Chinese Investment – BNN

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(Bloomberg) — Prime Minister Boris Johnson said he is not about to “pitchfork away” offers of Chinese investment despite the concerns of some of his own lawmakers. 

Decisions to bar Chinese companies from Britain’s fifth-generation communication networks and nuclear power, and condemnation of China’s human-rights record have soured relations with Beijing over the last few years, but Johnson maintains he is pro-China. 

“I am no Sinophobe — very far from it,” Johnson said in an interview with Bloomberg Editor-in-Chief John Micklethwait on Monday. “I’m not going to tell you that the U.K. government is going to pitchfork away every overture from China.”

Read More: Johnson Hosts Business Leaders’ Dinner Amid U.K. Investment Push

Johnson was speaking ahead of an investment conference in London on Tuesday designed to boost investment into the U.K. and just a fortnight before he hosts the Cop-26 climate summit in Scotland. With Chinese President Xi Jinping likely to be absent from the summit, concerns are growing China may refuse to set new climate change goals and deprive Johnson of a clear win on tackling global warming.

U.K. imports from China amounted to 67.6 billion pounds ($92.8 billion) in the year through June, according to U.K. statistics, a rise of nearly 40% from the previous year. That makes China the U.K.’s third largest trading partner.

“China is a gigantic part of our economic life and will be for a long time — for our lifetimes,” Johnson said. “But that does not mean that we should be naive in the way that we look at our critical national infrastructure.”

The government has said that Chinese firms are welcome to invest in non-strategic parts of the economy but Johnson refused to spell out exactly where he would draw the line. “You’d have to look at what you’re defining as strategic,” he said. 

As part of the investment conference, Huaneng will invest in a 50-megawatt battery project. 

The U.K. has already introduced legislation making it harder for foreign investors to take significant stakes in critical national infrastructure. 

Read More: China Blasts ‘Despicable’ U.K. Move to Ban Envoy From Parliament

Last month, China’s ambassador to London, Zheng Zeguang, was prevented from participating in a meeting in the U.K. Parliament in a case that crystallized the conflicting attitudes among Tory MPs. 

Zheng had been asked to attend by Conservative member Richard Graham, who chairs a group of lawmakers seeking to foster good relations with China. But the invitation drew outrage from others who have been sanctioned by Beijing for speaking out over alleged human rights abuses and the invitation was canceled by Parliamentary Speaker Lindsay Hoyle. 

Beijing has repeatedly denied any mistreatment of its Muslim Uyghur minority and insists crackdowns in Hong Kong are to prevent insurrection. 

Johnson insisted that the relationship can prosper “in spite of all the difficult conversations about the Dalai Lama or Hong Kong or the Uyghurs.”

“Actually trade with China has continued to expand for a very long time and I think probably will continue to expand for the rest of our lives,” he said. 

©2021 Bloomberg L.P.

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