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.
US President Biden’s radical plan for a global minimum corporation tax faces a significant road block from Ireland - C’mon man 10% for the big guy.
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.
It never rains, but it pours
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).
Still, we have influential voices in our favour
A New Global Tax Agenda
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?
Is Ireland about to lose over €2 billion a year in tax revenue?
So all of this has been for €2bn in tax revenue per annum. That’s it. The transformation of Ireland at the whim of big tech and pharma, the mass migration. The sullying of the reputation of the country as a brass plate tax dodge. For €2bn a year.
€2bn a year is the motor tax revenue up to the month of September. A motor tax revenue of €3bn per annum that is supposed to disappear with Internal Combustion Engines by 2030.
Or less than 40% of the €5bn odd spend on NGOs every single year. Many of whom act against the interests of the Irish people, while taking their hard earned taxes.
Charlie Haughey wouldn’t be able to show his face around the Dublin of today. So full of charlatans and chancers that it is.
Maybe I’m way off here but isn’t the corporation tax negligible (somewhat) compared with the amount of money that income tax brings in from the fact that all the global corporations are here. Other bonuses from their presence include subsidising VHI and capital gains tax revenue. Alongside all the other money they plough into the economy by their workers presence. I thought the main danger of us having to increase the corporation tax is that some of these companies might just decide to leave and all the auxiliary benefits of having them here would go.
I’m not arguing against the fact that it would be much better to have home grown businesses doing well that would take up the slack for this just for the fact that I believe the corporation tax shouldn’t be the main focus of this relationship.
Similar arguments were used when querying the artist exemption, and the likes of U2 paying little tax in Ireland.
The well versed argument being that Bono and Co. pay VAT here, employ people here etc and if we tell him to get on his bike for undermining our society, or try and order him to pay tax here, he will just bring his talent and associated expenditure elsewhere. Being the level headed pragmatist that he portrays himself to be.
The bottom line is that it’s the ordinary PAYE taxpayer who keeps the lights on in this country. If Multinationals exited yes GDP would collapse, but as it is a pointless measure in Ireland, life would go on. Yes, tax revenue would drop, but maybe the country would become more competitive, you know, the cost of living and government expenditure could no longer be artificially inflated.
Maybe the air would deflate out of the property bubble. And the change wouldn’t be nice. But you’d adapt and you’d survive. Like your forefathers did.
We could call it The Grand Reset
Have no fear for my adaptability Epicurus, but it’s not me you need to convince .
Employment law solicitor Richard Grogan told The Irish Times the “floodgates have opened” as a result of Facebook’s announcement. Other multinationals are likely to facilitate employees working remotely from other jurisdictions, he said, even though doing so is a “nightmare” from an employment law point of view.
For years, Ireland has prospered from rock-bottom tax rates that have drawn some of the biggest U.S. companies to set up large operations on its shores.
Now, an effort led by the U.S. to stop tax-avoidance schemes is threatening Dublin, as Washington seeks an international agreement setting a minimum tax rate for big multinational corporations, and reallocating the right to tax some profits to countries where goods and services are sold, rather than where they are made.
Forced change’ to Ireland’s corporate tax rate could trigger migration of activity
Under pillar one of the OECD reforms a proportion of profits booked in Ireland would be reallocated and inevitably reduce Ireland’s corporate tax take, DBRS said, noting the Irish Government had already budgeted for €2 billion of losses arising from the this.
A global minimum rate – set at 15 per cent, envisioned under pillar two, will “be more consequential”, it said.
This would require Irish domiciled corporates to “top up” their tax contributions.
An attempt to accurately model how a new corporate tax regime would affect Ireland would need to reflect a full range of negative impacts including those on employment and incomes.
“Most impactfully, a forced change to Ireland’s tax rate might spur firms to reassess their commitment to Ireland and shift activities or intangible assets to other jurisdictions that do not comply with the new global minimum standards,” it said.
“An exit of a handful of large multinationals could have large spill over consequences to the rest of the economy,” it said.
The company cites recent research by the Irish Fiscal Advisory Council (Ifac), which warned a “pillar 2-like shock”involving five large multinationals redomiciling their business away from Ireland could result in a direct corporate tax loss of €3 billion and a direct loss of 5,000 jobs and 15,000 indirect job losses, resulting in higher unemployment and emigration.
Oh looks what just got published this evening, with all attention on the Dail passing a bill to legalise discrimination in the country.
Wait, this guy is working overtime here,
Ireland ‘cannot be part of’ current global tax reform proposals – Donohoe
Mapped: Visualizing GDP per Capita Worldwide - Ireland is now 2nd place in the World! That’s up one place from last year even beating Switzerland this year according to the IMF.
Here’s a look at the 10 countries with the highest GDP per capita in 2021