Apple, Ireland, EU, Tax Avoidance, Margrethe Vestager, CCCTB


#241

This might be a stupid question, and maybe it belongs in the Section 110 thread, but this amendment to the finance bill which exempts vultures from capital gains tax for five years, does that not incentivise them to realise those gains within five year? i.e. Dump their acquisitions onto the market again?


#242

Bingo

In Committee, Eoghan Murphy stated - with a straight face- that the purpose of the CGT exemption was to incentivise vultures not to dump Irish property. As anybody knows, paying CGT is what incentivises investors to hold a position (reason so few sold in 2007 despite knowing assets were expensive) and earn the income yield (which as Donnelly showed for Cerberus in Project Eagle now runs at 30% per annum).

It was also pointed out that if a Vulture Fund bought in 2012, that 4 of his 5 years had been worked through (i.e. he can sell at the end of 2017 and get it all CGT free). FG have a policy decision against foreign funds paying tax in Ireland. They consider vulture fund investments to be FDI (like Apple), but actually, as we have shown, it is more like Reverse FDI.

Whole thing discussed in more detail here: thepropertypin.com/viewtopic.php?p=900844#p900844


#243

We are not Apple, we are not a Vulture Fund … we are only following the rules, claims Facebook

Facebook is now rapidly rising in the ranks of world’s largest tax avoiders.

Want to know why US Tech firms supported the Democrats so enthusiastically. Because the US Treasury forces the US IRS to allow US Tech get away with the world’s largest IP tax avoidance scams. And of course, Ireland is the destination of choice for the most important scam of them all - sheltering from large and high EU tax authorities.

Headline of Facebook (Ireland)

  • €7.89bn in Irish Revenue (c 50% of global Facebook revenue)
  • €77.5m in Irish Staff costs (yes, million not billion), or less than 1% of Irish Revenues
  • €7.7bn in Irish “expenses” (i.e. the IP scam royalty payments to some “offshore” entity)
    = €16.53m (yes, million not billion) in Irish taxes.

IRISH INDEPENDENT: ‘We do not avoid tax’ insists Facebook
independent.ie/business/irish/we-do-not-avoid-tax-insists-facebook-35289024.html

Enough tax avoidance to even make a Vulture Fund blush.

These guys are not here for the 12.5%, they are here for the c 0%.

Michael Noonan’s crusade to made Ireland the powerful tax haven INSIDE the EU tax treaty system.


#244

Seamus Coffey goes there …

Coffey’s academic upbringing sometimes lands him in conflict with capital markets views of the world (a very good example his initial misunderstanding of the Section 110 SPV scandal is discussed here):

Mars Capital Ireland Case Study: How the Irish Exchequer Will Fund OakTree’s Investment in Ireland
thepropertypin.com/viewtopic.php?p=886799#p886799

However, when it comes to National Accounts, Seamus Coffey’s deep expertise is clear. On form, Coffey has a terrific ability to distill down to a single calculation or table. This post is bristling with Coffey examples:

The c €7bn extra Apple charge Margrethe Vestager uncovered without even knowing it
thepropertypin.com/viewtopic.php?p=889565#p889565


Sombody who knows the inner workings of the DOF better than I, explained that Seamus Coffey’s new appointment by Michael Noonan to a major Irish tax review investigation, was as much to shut Seamus Coffey up (and stop him doing any more Leprechaun Economics type blogs, or the embarrassing GNI/GDP table), as anything else.

However, Seamus can’t help but keep re-producing those simple but devastating calculations (something you would never get from the crony ESRI reports, or the legions of other “independent” State investigators.

IRISH TIMES: Tax reform: TDs told Ireland has more to fear from EU than Trump
irishtimes.com/business/economy/tax-reform-tds-told-ireland-has-more-to-fear-from-eu-than-trump-1.2904023

IRISH TIMES: EU scheme could slash Ireland’s tax base in half’
independent.ie/business/irish/eu-scheme-could-slash-irelands-tax-base-in-half-35292501.html


Make no mistake, Coffey’s calculations are not the worst outcome here. As he points out himself (and we did in the first post on this thread), CCCTB would so fundamentally change the nature of the EU tax calculation, that MNCs would be incentivised to allocate even more costs (i.e. jobs) to high tax countries (i.e. not Ireland), to maximise total tax relief.

Ireland has always been a tax haven with a small “t”.

However, since the financial crisis, we have dramatically upgraded the scale of tax evasion that MNCs, Vulture Funds and Commercial Property Landlords have been practising in Ireland. We have made fools out of our EU partners (Apple Tax), and ourselves (wiping all Irish taxes for Vulture Funds as they evict Irish families, and Commercial Landlords as the jack up rents).

Michael Noonan (and his junior partner Eoghan Murphy) have created a grotesque recovery.

However, our EU partners (and Donald Trump) are going to make us pay for it.

Perhaps, like the Trokia, they may save us again from our ex school-teacher led economy.


#245

Probably starting today …

recode.net/2016/12/14/139507 … bs-economy


#246

Kenny and Noonan’s epic adventure as the EU’s most aggressive Tax Haven nears its end

IRISH TIMES: Taoiseach rebuts Oxfam claim that Ireland is a tax haven
irishtimes.com/news/politics/oireachtas/taoiseach-rebuts-oxfam-claim-that-ireland-is-a-tax-haven-1.2906486

Noonan’s most reliable way of dodging difficult questions is to answer an easier one.

We saw this technique used in the Section 110 SPV tax scandal, until the public pressure became too great.
(He is now using his 2nd favourite technique, which is to “clampdown” by creating new “loopholes”).

However, doesn’t mean the same technique can’t be used again for issue of Tax Havens.

Oxfam (and the New York Times, the Wall St Journal, the FT, and Brazil) have branded Ireland a Tax Haven, because Ireland is the leading facilitator of major global corporations avoiding all non US taxes (not 12.5%, but 0.001%) on their global profits.

IRELAND: The Tax Haven that dare not speak its name
counterpunch.org/2016/01/12/ireland-the-tax-haven-that-dare-not-speak-its-name/

It is not by accident the non-US HQ of most of the world’s biggest US Tech firms are in Ireland (Google, Apple, Facebook, Microsoft etc) and that all of these run approximately 50% of their global revenues through their tiny Irish platform.

For Oxfam (and most of the 1st world), this is the definition of a Tax Haven.

Noonan and Kenny however ignore the 0% tax rates being paid by US MNCs in Ireland, the 0% tax rates being paid by Vulture Funds in Ireland, and the 0% tax rates being paid by Foreign Commercial Landlords in Ireland.

Kenny and Noonan take an “old school” approach (probably given the fact they are both ex school teachers). What they say we are really good at, is clamping down on any drug money, money laundering, etc. being run through in Ireland.

For Noonan and Kenny, this is the definition of a Tax Haven


We are really good (according to Noonan) at stopping the Tony Montana’s hiding their hundreds of millions away.

However for the US MNCs avoiding billions in EU taxes … maybe, not so much.


#247

The propaganda war is on. Not much of an independent free press there to be seen.
The language in these articles is very emotive.
This seems to be an attempt to win the minds of the Irish public even at the expense of stirring up negative sentiment toward the E.U. project.
The irony of this is that the no-tax agreements which Ireland seduced these multi-nationals with were only attractive because Ireland is a part of the E.U. project.

rte.ie/news/2016/1219/839841 … ax-ruling/
irishtimes.com/business/econ … -1.2910851
independent.ie/business/iris … 04298.html

Sometimes you just have to step back and call a spade a spade; The Irish Regime in residence is a craven shitty little entity that will happily undermine a greater E.U. project while destroying the tax base/impoverishing its partners in the project with questionable benefit to the Citizens of Ireland.
If the Citizens of Ireland even got something in return for this like low VAT and Income tax rates or the best health service in the E.U. then you could attribute some sort of genuine motive to their shenanigans.


#248

Oh Jesus H Christ - Michael Noonan doesn’t understand the meaning of the word escrow -

rte.ie/news/business/2017/02 … -decision/

Michael - when money is put in escrow it is managed by an independent 3rd party. I know you know feck all about finance or technology but you could at least use a dictionary if you have one in your bookcase.


#249

We need more Oireachtas committees they say, thats where the real work takes place they say.

independent.ie/opinion/colum … 17016.html


#250

Whats going on in NZ?

Apple ‘paid no tax’ in New Zealand for at least a decade
bbc.com/news/business-39361914


#251

wsj.com/articles/trump-want … 1493057898

Trump wants a proposal for a 15% corporate tax rate by Wednesday. Doesn’t have to be revenue neutral.
Good look getting that through Congress.

But if he achieves it, or even say a 25% rate it will be bad news for Ireland.


#252

Apparently Mnuchin and the US Treasury wants to use a “dynamic” method of calculating revenue where growth (and tax revenue) increases because of the tax cuts, whereas the people who will vote on it, the US Congress, uses a “static” method where cuts in tax have to be made up in cuts in spending. Something their voters don’t like so much.

Mods: BTW if this belongs on a different thread please move it.


#253

ft.com/content/9906bcdc-2a8 … 8383da43b7

Steven Mnuchin promises biggest tax cut in US history

He wants 15% corp tax. Estimated to cost 2.2 trillion dollars over 10 years. He cannot guarantee it will be revenue neutral, so difficult for Ryan and company.

The Joint Tax committee says even a reduction to 20% would cause a “non negligible revenue loss”

I think they will end up with 20-25% corp tax.

This (15%-20%) reduction will definitely affect FDI into Ireland.


#254

In what way? Tax paid overseas is and will continue to be an offset against US tax.


#255

Hopefully you will be able to read this its the one pager given out at the press conference

twitter.com/alivitali/status/857288194290839553


#257

Again, I don’t see the mechanism that this would be damaging through? Irish hot money is profits from the rest of the world outside America. Is that still going to flow through Ireland? Do we care? Very little of it sticks anyway, except to bork GDP.


#258

That depends whether you think the likes of Apple, Facebook, and Google are here for our highly skilled and reasonably priced workforce, or to make their tax avoidance look more plausible.


#259

It is european tax avoidance, though, not US. The money is then funnelled into offshore havens and parked there. It is borrowed against in the US to give dividends/do share buybacks. They have been waiting for the US government to crack and offer an amnesty for years and now Trump has caved. Why? Because for the next few years, there will be a bundle of money come in as all the parked funds are repatriated. Then it’s the democrats problem that the budget is bust. Anyway, polemic aside, I don’t see that the US tax rate bears any relation to the double Irish or the Dutch sandwich. Those are methods of getting money out of the EU untaxed, with the Dutch sandwich being arguably the more important one.


#260

All the IRS has to do is simply enforce the 1986 Regs. End of story. Its total world income for Americans, individuals and corps. All world income is assessable for US tax. All US corps can legally do is offset local taxes paid against US taxes. Thats it.

Its just for the last 20 years or so the IRS has not actually enforced IRS regs against Apple, MS and their like for reasons that lead to directly to Commissioner of Internal Revenues office in DC. During the Clinton era the Commissioners office, like the FCC etc, became a nakedly for sale office to lobbyists. The mid level staff at the IRS are just itching for the first chance to take Apple and their ilk to the cleaners. In each case several hundred billion dollars each in back tax and penalties. In the case of Apple and MS their cash hoard would just about pay their tax bill. If and when the IRS come calling.

As for Ireland, its just a slightly more plausible version of Bermuda and the Cayman Islands and IRS officials during hearings on the Hill have been trying for more than two decades to have Ireland formally declared a tax haven. It very nearly happened in the late '90’s. Only reversed by the WH at the last moment. The day after the IRS declare Ireland a tax haven just watch 90% of the US MNC’s decamp from the country. The only reason they are in the country is because the IRS dont currently consider it a tax haven. In case your wondering the IRS have also been making loud comments in public about the Netherlands, Luxembourg etc. Given that Ireland is only important to US MNC’s whereas the Netherlands, Luxembourg etc are very important to German, French and Dutch MNC’s if push came to shove Brussels would sacrifice Ireland without batting an eyelid if it meant protecting the Netherlands and Luxembourg arrangements.

Wider effect? Well just watch GNP numbers drop 30% plus. As long as the ECB keep buying Irish gov bonds no problem. When the ECB stops. Hello Iceland.

Ireland 30 years ago had an economy of sorts. Ireland 15 years ago had a kind of economy. Ireland today has no meaningful economy apart from the MNC tax visitors and the economic activity due to government expenditure based mostly on borrowing against a grossly inflated gnp/gdp numbers, due to the MNC economic activity.

So its an inverted house of cards with the tax haven MNC’s at the bottom. What could possibly go wrong.


#261

Part of the reason I think its game on is that as long as the money was untaxed / stateless everyone was happy to play along. Once the EU decided to go after Apple (at a time when the US beating up VW) then the rubicon was crossed.

If the US doesn’t repatriate the money now it needs to consider if the EU / Brexiteers will get greedy - esp. if it taxed it at headline EU state rates (not the mythical irish 12.5%) - it could lose on the double (MNC’s would suddenly turn up in US looking for a tax credit)