Euro200bn INTERNATIONAL PROFIT TO BE REPATRIATED UNDER US JOBS CREATION ACT 2004

The US Jobs Creation Act, which was passed just prior to the recent US elections, allows subsidiaries of US companies based outside the US to repatriate profits at a significantly lower tax rate on a once off basis. It is anticipated that as a result of the Act that up to Euro200 billion will be moved from international subsidiaries to parent companies in the US.

Speaking at a seminar hosted by Bank of Ireland in association with Ernst and Young, David Smyth, Head of Tax Services Ireland Ernst and Young advised a number of leading Irish based subsidiaries of US multinationals on the implications of the US Jobs Creation Act 2004 on their business. "The Act is part of a programme to stimulate job creation in the US. To assist in implementing this programme all repatriated profits must be reinvested in the US. Effectively, the Act means that US subsidiaries can repatriate profits at a US tax rate of 5.25% rather than the normal rate of 35%."

Companies attending the seminar included Pfizer, Merrill Lynch, Becton Dickinson, PFPC and Takeda.

Mr. Padraig Rushe, Director, Bank of Ireland Corporate said, "We do not anticipate that the US Jobs Creation Act will have serious long-term implications for the Irish economy or make Ireland less attractive to US businesses. While there may be an initial reduction in investment as cash is repatriated it is expected that US subsidiaries will continue to generate more cash and build reserves for investment in the period ahead."

The implications of a significant piece of new Irish legislation, the Irish Holding Company Legislation 2004 were also discussed at the seminar. Under this legislation, US multinationals with non-Irish registered holding companies operating in Ireland will no longer be liable for a 5% withholding tax on dividends to the US.

"The new Holding Company regime improves Ireland's attractiveness and creates opportunities for major Multinational Groups to set up Headquarter type operations here in Ireland," Rushe continued.

8th December 2004

ENDS

For reference:

Marie-Therese Culligan
Marketing Manager
Bank of Ireland Global Markets
Tel: 01 609 3646

Anne Mathews
Media Relations Manager
Group Corporate Communications
Tel: 01 604 3836