Rory McIlroy tax move means Republic reaps the benefits while Northern Ireland is left lagging
Rory McIlroy is the world's best golfer, but he is also a brand with global reach - and the potential to generate hundreds of millions of dollars, perhaps billions, over the next few decades.
That brand is now based in the Republic, and will generate tens of millions of euro in tax revenue over the same period.
The 25-year-old’s decision to locate his intellectual copyright business in Ireland is both significant and interesting for many reasons. It shows that Dublin is now home to enough expertise to meet the complex demands of a man like McIllroy. The reason Dublin can now do that is simple; McIlroy requires the same sort of laws and lawyers that companies such as Google and Facebook need.
Both the multinationals and McIlroy require a sophisticated tax regime that understands their needs and has tax treaties with other countries as well as the services of world-class accountants, brand experts and PR companies.
McIlroy will also benefit from the Republic’s famously low business taxes.
Even though the Queen signed off on laws that will eventually allow Stormont politicians to set Northern Ireland’s rate at the same level, we are still playing catch-up. Investors won’t be able to benefit for at least two years, and any decrease is likely to be incremental. And whether it happens at all will depend on Stormont leaders resolving their differences — financially and politically.
Corporation tax powers will mean little if they are dependent on a welfare reform crisis that doesn’t get resolved. And as well as attractive tax rates, foreign investors have one other main demand — political stability.
Those who know McIllroy say he is intensely focused on his legacy. This means he wants to keep his financial matters simple so that his reputation remains unsullied and to ensure that he can concentrate on his game to the exclusion of almost everything else.
McIlroy has horrendous demands on his time. He may be known for his golfing genius, but he is forced to lead a highly streamlined life to allow him to focus on the golf which will be his legacy if he avoids the distractions, financial and otherwise, which have bedevilled so many others.
Whether McIlroy stays the course is in the hands of the gods — but he appears to be taking a sensible step this week after the bruising, distracting and acrimonious legal action with his last management company. By creating a simple Irish company to manage his affairs, the golfer benefits both Ireland and himself.