Europe

Obama criticises US firms for becoming 'magically Irish'

President Barack Obama Image copyright AP
Image caption Mr Obama who is of Irish descent on his mother's side, made the remarks in a CNBC television interview as he visited Los Angelas on Thursday

US President Barack Obama has criticised American firms for becoming "magically" Irish, in order to avoid paying business taxes in the US.

He accused firms of changing their mail address in order to take advantage of lower tax rates in the Republic of Ireland and other countries.

Mr Obama described the practice as "gaming the system".

The president, who is of Irish descent on his mother's side, made the remarks during a CNBC television interview.

Several large US companies have set up European bases in Dublin in recent years, including Google and Facebook.

More recently there have been a series of takeovers of Dublin-registered companies by US firms in a process known as "inversion" and such moves have been controversial.

Image caption Mr Obama has visited both Northern Ireland and the Republic of Ireland during his presidency

Mr Obama told CNBC: "This is basically taking advantage of tax provisions that are technically legal, but I think most people would say if you're doing business here, if you're basically still an American company but you're simply changing your mailing address in order to avoid paying taxes, then you're really not doing right by the country and by the American people."

He added: "If you simply acquire a small company in Ireland or some other country to take advantage of the low tax rate, you start saying 'we're now magically an Irish company' despite the fact that you may only have 100 employees there, and you've got 10,000 employees in the United States, you're just gaming the system."

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