Two things to expect in Budget 2015 for tech companies

14 Oct 2014

Microsoft's Irish HQ in Sandyford, Dublin.

With full details of Budget 2015 imminent, two expectations are likely to define the future of the international tech scene in Ireland, including how the Government plans to secure data for the future.

Double Irish with a Dutch sandwich and a side of cautiousness

Going by all reports, the Government is finally about to give in to pressure from all sides and negotiate a gradual winding down of our tax system that has become widely known as the ‘double Irish’.

Google, Facebook, Twitter and Apple; they’re all based in Ireland largely to avail of our current corporate tax rate of 12.5pc which is then passed through a number of subsidiaries in Ireland, the Netherlands and various other states to pay as little tax as possible.

Now however, reports say that these companies are very much aware that these days are drawing to a close as starting from next year, no new companies will be able to avail of the corporate tax loophole.

For the companies already firmly established here, the timeline will now be to get their tax affairs in order before the year 2020 as this will be the official end of the double Irish system which could see these companies feel their ‘fight or flight’ reflex kick in.

Initial expectations of how tech companies are likely to re-model their existence here in Ireland could be the closing of what are effectively their ‘intellectual property houses’ that are key to companies being able to process money through Ireland with Apple’s establishing of its office here in 1980 as one of the first examples.

Grand Canal Dock will be the epicentre for the expected tax changes and ramping up of data protection measures.

More money to protect data

Having only been appointed as Data Protection Commissioner last month, Helen Dixon is expected to receive a welcome boost to her part in regulating the world’s largest tech companies who have made Ireland their European base, for the time being at least.

Spending approximately €1.7m last year in data protection issues, Dixon and the Minister for Data Protection, Dara Murphy, could see a budget increase of approximately two-thirds or more on the previous budget.

It is also expected that a second office will be established in Portarlington in County Laois to further increase its scope of operations and securing people’s data from threats online and even from the major companies hosting that data.

However, Seán Kelly, MEP for Ireland South who has been vocal on technology issues in Ireland, believes that ensuring data protection is also vital to ensuring the growth of online business.

“We have a situation where businesses, particularly businesses that are trying to innovate using the internet, are being adversely affected because users are wary of giving their information,” said Minister Kelly. “If you want to grow businesses on the internet, you have to have the confidence of the data subjects. Twelve months ago people didn’t care, but now they feel that once something goes on the internet, there is no guarantee it will be protected, whatever the right to be forgotten law says.”

Grand Canal Dock image via Shutterstock

Colm Gorey was a senior journalist with Silicon Republic