"Accenture does not expect any material change in its operations, financial results or tax treatment as a result of the change in its place of incorporation. The company will continue to be registered with the U.S. Securities and Exchange Commission (SEC) and be subject to the same reporting requirements as it is today. Accenture's shares will continue to trade on the New York Stock Exchange under the ticker symbol 'ACN.'"
So there you have it. Move along, folks, there's nothing to see. Sure, one of the biggest professional services firms in the world has decided to up sticks and relocate to a whole other continent, but it's got nothing—absolutely nothing—to do with the current focus on corporate tax havens and loopholes. Well, OK, maybe it does. An Accenture spokesman as good as admitted it does, in fact, to no less august a publication than The Wall Street Journal: "'There are continued questions about companies incorporated in Bermuda,' said Jim McAvoy, an Accenture spokesman." What sort of questions? How about why Accenture paid around 10 percent less in taxes than the average U.S. incorporated business in 2008—a difference that the Journal says company filings largely attribute to lower taxes on non-U.S. operations.
So why Ireland, and why now? Well, again, the Journal has what may be the answer: "Such moves could help companies preserve the tax benefits they had in Bermuda and the Cayman Islands, while using Switzerland or Ireland's tax treaties with the U.S. to protect them from possible adverse legislation."
So there you have it in full translation—no "material change" in tax treatment equates to getting out while the getting's good. Small wonder, then, that there's been a conspicuous lack of hand-wringing in Bermuda—at least according to this editorial in Bermudan newspaper The Royal Gazette. "In truth its presence in Bermuda has been a mixed blessing," says the piece. "Because Accenture has held a great many large contracts with local and national governments, its Bermuda headquarters often attracted unneeded political attention. At the same time Accenture has never had a large physical presence and did not contribute a great deal to the Island in economic terms." Would that have anything to do with the fact that the island charges zero percent corporate income tax, one wonders?
Of course, the move still has to be ratified by shareholders in the next three to four months—a process that seems a lot more likely than the firm incorporating in the U.S., or getting all tangled up in a government crusade against firms operating out of offshore tax havens.
Ta-ta to Ramadorai
In another example of the consulting world giving us a heads up on a change that's still months away, Tata Consultancy Services revealed last week that it had identified a new CEO to replace Subramaniam Ramadorai, who is retiring from the role in October. According to several media reports, Chief Operating Officer N. Chandrasekharan will take over on October 6.
--Posted by Phil Stott
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