Google pays €27.7m tax at Irish subsidiary on €17bn revenue

Google pays €27.7m tax at Irish subsidiary on €17bn revenue

irishtimes.com/business/sect … -1.1877432

If we got 12.5% CT on 17bn that would be 2,125m. We got 27.7m

I’ve written about this before, but many moons ago I was talking to the revenue commissioners about people separating out the purchase price of property against ‘contents’, in an effort to pay less stamp duty.

The revenue simply answered ‘We know it’s happening, just don’t take the piss’.

Google, Apple et al are taking the piss.

You never get CT on revenue anyway, so that’s no really a fair comparison. Every company is allowed offset its allowable expenses.

Fair enough. Might get them down to 1,900m they should owe. Still massively gaming the system

It does look that way. But may as well be correct when calling them on it!

Profits of E189m should mean tax of E23.6m, when in fact they paid E27.7m. That seems entirely fair. The issue then is what the royalty payments are about.

If Ireland had a sovereign wealth fund which all mutlinationasl had to devote shares to when opening up in Ireland then Ireland would get more from the deal.
Ireland’s facilitation of tax avoidance has a definite impact on the profitability and turnover of these companies but it derives no benefit from the deal.
We know that GDP is overstated and Irelands share of the EU bill is increased in proportion to Irelands GDP.
We know that Ireland has to build loads of infrastructure to connect these incoming companies to their localities.
We know that their employees from abroad put strain on local infrastructure e.g. housing.
We know they compete for a finite amount of commercial space in the larger cities.
IDA spends money attracting these multinationals.

Ireland isn’t getting enough out of this to justify the strain it does to the local economy/society.
Having active multinationals in a small economy is desirable but not at any cost in fact where it becomes a “cost” rather than an “income/asset” then the cost of stimulating the indigenous industry is money better spent. I’ve no idea how you’d quantify that or even convince the Government of it as the current policy of facilitating multi-national tax avoidance/evasion is political dogma that every side has bought in to.

I actually agree with your fundamental sentiment but to pretend Google is a net cost to Ireland is mental.
The amount of PAYE they would pay, for one, you’re ignoring. And the aggregate demand the workforce brings to its local region is absolutely massive.

We wouldn’t though because the 17bn is not the profit they’ve made.

Is this axiomatically a good thing?

Well if you are a shopkeeper it is.

The key point that I take out of this is one that I have made before on the pin… not ALL FDI is good… but the Irish govt seem to think that it is. Similarly if you are running a small business not ALL new business is good… you have to be making a profit from it after you include the additional costs associated with new infrastructure, plant, etc… For me it is the stability of the company and how much training they pass on to their local hires that is key…

Google pours cash into the economy. from the staff PAYE, to the bars, clubs and restaurants, to the professional service firms picking up big pay cheques, to the tradesmen and taxis and printers and decorators and everyone else that has done some work for them at good margins.

My company is so large that the headquarters isn’t being expanded anymore and an office a few km removed from headquarters is being increased in size instead. The headquarters is so large that it puts stress on the local economy/infrastructure/society and that is not good. more demand is not necessarily good.

Of course extra jobs in a community should be limited because of the strain it puts on the bars, shops, restaurants. Not to mention the additional work created in support industries.

You don’t see the amount of taxes which have gone in to the infrastructure links purely to support that massive headquarters such as motorway off-ramps, flyovers, interchanges on landstrasses, provision of water supplies, electrics to the mushrooming local (what was once small) town.
There are high taxes on companies here so they funded this; that isn’t the case in Ireland.
Irish Government lives in faint hope of trickle down effects to finance all of that and all we know for sure is that Google only paid 27.7m in tax which would barely pay for a bridge across the Liffey when DCC are involved.

I never realised goggle employees do not pay taxes in Ireland.

I would have thought their payroll taxes alone would have been in the range of €45m p.a. :slight_smile:

That is pure speculation on your part.

Also, having seen my former co-workers positions being made redundant you can’t assume they’ll always be there. Jobs were repatriated home. One of the replacements was announced here in Germany today.
They were grant-aided in Ireland originally BTW and jobs continue to get grant-aided.

The good thing about indigenous companies is that they usually remain indigenous.

Yes it is :slight_smile:

But I would be very surprised if I understated the tax take.

I’d say somewhere in the €5-10m range, given there’s around 3k people there.

Average salaries are well in excess of €40k gross per employee or €30k net of tax.

Add on employers PRSI that’s €14k in payroll taxes each.