1 “Ireland as a Platform for European Expansion” Tax Considerations Adrian Crawford KPMG Tax Partner Dublin & New York “Ireland as a Platform for European Expansion” Tax Considerations Adrian Crawford KPMG Tax Partner Dublin & New York

2 Ireland – Basic Tax Attributes Tax Rate: 10% & 12.5% tax on manufacturing profits 10% expired on 31 December 2010 for “pre-98 manufacturers” 12.5% rate applies to all other trading activities No “ruling” required to avail of 12.5% tax provided activity is “trading”. Rulings often obtained for treasury and IP licensing activities. 12.5% tax on certain trading dividends 25% tax on other passive profits (e.g. interest etc) 0% WHT on dividends paid to US controlled groups R&D Tax credit of 25% available against all profits Exit charges can be avoided Stamp duty/ transfer tax but exemptions

Ireland as a holding company location Recent inversions include Accenture, Covidien & Warner-Chilcott. Participation exemption on disposal of certain shareholdings (5%, 12 months, trading, EU/DTA). 12.5% rate on “trading dividends”: dividends paid out of trading profits of EU/DTA resident companies, dividends paid out of trading profits where payer is quoted or a 75% sub of quoted company, dividends paid out of mixed profits or non-trading profits of a company where not less than 75% of that company's profits are trading and not less than 75% of the assets of the recipient and its subsidiaries are trading assets. portfolio dividends (shareholding of 5% or less), exempt if trading receipt Pooling of excess foreign tax credits on dividends 3

Ireland as a holding company location WHT exemption on dividends paid to EU/DTA residents Intangible asset tax depreciation regime Interest relief for investments in subsidiaries Limited thin cap rules Wide treaty network Regulated onshore regime EU Member State 4

5 R&D tax credit – Further reduces effective tax rate below 12.5% 25% tax credit on qualifying R&D spend Available in addition to the 12.5% deduction => net subsidy of 37.5% for R&D spend Can be used to shelter a group’s corporation tax liability or carried forward indefinitely to reduce a company’s future tax liability “Above The Line” accounting treatment possible

Royalty payments No wht on royalty payments, save certain patent royalties Patent royalties exempt from WHT if: the payee is a company which is neither resident in the State nor carrying on a trade in the State and is the beneficial owner of the royalty payment; the royalty is payable in respect of a “foreign patent”, under a licence agreement executed overseas and subject to foreign law; the payment is being made in the course of the paying company’s trade; and the payment is not part of a back-to-back or conduit arrangement. 6

Royalty receipts 12.5% rate if trading i.e. brand management Withholding taxes creditable for treaty & non-treaty countries where trading No pooling of excess withholding tax credits (yet!) 7

Interest receipts Active treasury income taxed at 12.5% Withholding taxes creditable for treaty & non-treaty countries where trading Pooling of excess foreign tax credits where: trading, Interest is paid from treaty country, and 25% relationship. 8

9 Transfer pricing Introduced with effect from 1 January 2011 Grandfathering for arrangements in place at 30 June 2010 Only applies to trading activities (i.e. not to interest- free loans) User friendly regime – can rely on existing documentation from other jurisdictions

10 “TWO TIER” IRISH STRUCTURE US NRI IRELAND Profit Strip via royalties NRI – Irish Registered but Non Irish Resident company, e.g. managed and controlled in the US or Bermuda IP Owner - “Super profit” taxed at 0% Routine profit taxed at 12.5% Typically total effective tax rate 2.5-5% depending on pricing (assumes no repatriation to US and Sub-part F issues managed) EMEA profits Cost Sharing Agreement

11 Structured Finance Special Tax Regime – the “Section 110” company Irish resident company engaged in the holding/management of “financial assets” Includes shares, bonds, options, swaps and similar instruments, all types of receivables, leases, loan and lease portfolios, commercial paper, carbon credits, insurance and reinsurance contracts. May also hold plant and machinery and carry on a leasing trade. Must conduct business at arms’ length. Minimum day-one value €10m.

12 Structured Finance “Section 110” company – Tax Treatment Deemed to be trading so expenses deductible. Profit participating debt fully deductible, save certain anti-avoidance measures. Treaty network can reduce/eliminate withholding taxes on income received. No minimum profit required for tax purposes. Wide range of domestic exemptions for withholding tax on interest. No Stamp Duty on issue or transfer of notes issued by S.110 company.

13 Contact Details Adrian Crawford Tax Partner Phone Dublin: Phone New York:(212) Kevin Corcoran Senior Tax Manager Phone New York:(212)