If this passes? Ireland has known this day would come for years and we have, as usual, squandered our opportunity to improve our domestic economy enough that we could operate without stealing the MNC taxes of other countries.
Instead we thought we could be clever and get rich selling each other houses…again. Wonder if we will have a major correction on our way overly priced property? If the US corporations leave and you take away our property then we are left with just a skilled workforce… Interesting times a head, hopefully it won’t pass and Joe will remember the bowl of shamrock we gave him on Paddy’s Day!
If you take a look at Poachers thread, AIC v GDP. a good argument could be made that if would be good for us in some ways if the US corporations just up and left tomorrow, the majority no longer get very much from the scam
Ireland’s corporation tax take is heading towards €10 billion per year. With a population close to 5 million, that’s €2,000 per year per citizen. Obviously, this comes on top of the incomes, share options, capital transfers and career opportunities for the 300,000 people who work in these companies.
The economist Seamus Coffey estimates that US companies in Ireland every year pay €8 billion in wages, spend another €4 billion on Irish contractors and another €4 billion on capital projects – on top of their corporation tax.
US companies already pay US tax on foreign income. All US taxpayers are assessed on world income and have been for many decades. Its just that none of the US high-tech companies have any meaningful foreign income. By design. And large amounts of US net income is shunted offshore. Given that one whole wing of the Democratic Party is a wholly owned subsidiary of the big tech companies this will not change anytime soon. Despite the headlines. When Apple, Google and Facebook etc pay the same percentage tax rate of gross income as say Big Oil then I’ll believe the press releases.
He’s got a point how will Ireland get away with 12.5% Corporation Tax if France & Germany are backing minimum tax rates @21%?
The minister for finance, Paschal Donohoe, said he was “not at all surprised” that France and Germany are backing minimum taxes. The French and German ministers have jointly presented spending and reform plans to the European Commission to access the EU’s €750bn pandemic recovery fund, ahead of the gone April 30 deadline. We have an extension to this week,
Is Ireland going to make a deal to access the EU’s €750bn pandemic recovery fund?
CT is so important now. Reminds me of Stamp Duty from Construction and that massive impact from the collapse in 2008.
CT over performing last few years kept us from large overspending vs Budget. We have now (doubled?) our National Debt with covid supports. Losing a big chunk of CT would mean a big recession imo as would require big cuts
Remember thats GDP, not GNI. Or whatever it is called this year. For GNI divide GDP by around 2. So that makes its 200%. Which is South America in the 1980’s territory.
I would not worry about the external debt number as at least 90% of it is the IFSC or the MNC’s. So just a few keystrokes away from moving to another country. Tap, tap, tap, and Treasury has moved $100B to another cozy haven elsewhere.
Having played the “Irish” card to help get elected, he will clearly not be using it when it comes to his financial planning to maximize the US tax take. We can probably forget about the US support with respect to Brexit as well that was promised.
It could, however, have been a lot worse. Biden and Treasury Secretary Janet Yellen really wanted to set their minimum corporate tax rate at 21 per cent, which was double the Global Intangible Low-Level Income tax which Trump applied to US corporations with tax haven operations. Biden’s desired minimum rate would have been above Britain’s current corporation tax rate, which would have allowed, for example, the US tax authorities to reel in some extra tax revenue from Google’s UK operation – at least in the meantime, before Rishi Sunak gets round to raising corporation tax to 25 per cent, as he has promised. Biden, by contrast, plans to jack the US corporation tax rate to 28 per cent.
At 15 per cent, the global minimum corporation tax will still give some incentive to set up operations in low-tax companies such as Ireland. It will still allow companies to benefit from paying zero corporation tax if they really are based in tax havens and don’t have operations elsewhere. But it looks as if this might be just the beginning, and the US taxman will soon be back for more. A very loud warning bell has been sounded for countries which are trying to attract investment through low tax rates. They well end up reminiscing fondly about the Trump regime.
In a 14-page document entitled Business Taxation for the 21st Century, which was prepared for the European Parliament, the commission proposed an allocation of the pooled corporate taxes for all large companies among the EU 27 states. The plan goes beyond an overhaul of taxing of digital multinationals such as Apple, Amazon and Google, proposed by the OECD.
It seeks what it calls a business in Europe framework for income taxation, which is widely seen as its third attempt in 15 years to build consensus for a common consolidated corporate tax base but now under a different name.
The Government has estimated the OECD reforms will knock at least €2bn a year (and possibly up to €4bn) it collects from corporate taxes and the business in Europe framework for income taxation plan by the EU now “has the potential to have a much more detrimental effect on corporate tax on Ireland”, Mr Coffey said.
The corporate tax takedown been brewing for decades but somehow we’ve postponed the day of reckoning - in fact, we benefited from the clampdown on brass plate operations in tropical islands - but we are fast running out of road. The great danger is not that we will have to raise our rate, which we will eventually, but that others (especially the US will lower theirs).
After decades of a ‘race to the bottom’, major economies are now backing a global minimum tax estimated to bring in $100 billion in new revenue annually. How can international tax reform contribute to a more equitable economic recovery?