Tax expert claims that Dyson could enjoy significant tax benefits in their decision to relocate its headquarters to Singapore depending on the registration of its intellectual property rights for its next generation of products.
Recently, Sir James Dyson, a British billionaire inventor, and Brexit supporter announced that he will relocate the headquarters of its vacuum cleaner and hair dryer technology business to Singapore. The companies' Chief Executive, Jim Rowan, said that their relocation is not connected to Sir James stand on Brexit. Instead, it is for "future-proofing" of the business. The company's relocation is scheduled over the coming months which mean that it could take place before Brexit.
Sir James is the sole owner of the company and he has an estimated personal fortune of £9.5bn. Rowan said that the decision of the company to relocate is not solely the decision of the owner but an executive team decision. Rowan also said that their move is part of the evolution of the company. Dyson was once described by Prime Minister David Cameron as the "great British success story".
The owner's decision created a strong impression in business and politics around the globe. According to experts, the owners move will have little impact on the tax that the company pays on its product lines. Richard Murphy, professor of practice in international political economy at City, University of London, said that it is unlikely that Dyson will change existing tax structures much.
He added that there would be a heavy capital gains cost for moving existing intellectual property out of the UK and the UK patent box is already attractive to the company. He added that if the company hopes to be a market leader in electric cars, thousands of patents may follow. He also said that Singapore does not tax income earned outside its territory and is fairly relaxed about a company locating income and IP in tax havens. He concluded that Dyson will win tax in the long run.
A Dyson spokesman said that the relocation is about the movement of two senior executives and the company's legal entity. He added that their move recognizes the significance of Asia to the company since the majority of its customers and manufacturing operations and productions are placed in Asia.
Most of the Brexit supporting leaders praise the fiscal system of Singapore. Theresa May and Philip Hammond have threatened to transform the United Kingdom into the Singapore of the West as a low-tax economy.
