Proposals for a common Euro wide Corporation Tax rate

rte.ie/business/2007/0502/tax.html

We have companies here employing hundreds dealing with VAT reclaims

rte.ie/business/2006/0405/tax.html

rte.ie/business/2007/0425/eutax.html

rte.ie/business/2007/0424/EU.html

finance.gov.ie/viewdoc.asp?DocID=4543

Will never happen.

why not? Do we have that much say in Europe?

It’s not just us.

They’re trying to bring the UK and the Swedes into the euro for example, this would only push them further away from the common market.

It will happen - and almost certainly within 5 years.

You can’t have a long-term stable free trade area if any or all of the members can act as a corporate tax haven for economic activity which doesn’t actually happen in their territory. The only possible long term result of that is a race to the bottom on corporate tax rates, resulting in near zero rates everywhere.

All that has to happen for ‘end game’ is that germany (alone or with some other countries) accesses the subsidary companies which do operate within their country for corporation tax regardless of whether they declare the profit there (based on a percentage of their europe wide profits, the percentage determined some harder to scam measures of the economic activity) - this will kill the transfer pricing scam stone dead, and with it a big chunk of the corporate tax currently paid in ireland (not to mention the ‘rider’ employment used to provide a bit of plausible deniability).

The recent moves by both austria and switzerland to specifically target german companies for ‘headquarter relocations’ to enable them to pay less corporation taxes has just served to focus the german taxman’s mind a bit more.

And germany (and/or others) need absolutely no agreement from anyone else to bring in this ‘alternative minimum corporation tax’ - they can do it within their own national tax laws anytime. Now that it’s becoming a growing cause of tax leakage, it will be addressed - how and when are the only questions.

If they can do it in a way which offers other improvements, like a single ‘tax base’ they will. If not, they’ll close the loophole anyway, just to stop the rot.

rte.ie/business/2007/0718/taxruling.html

Sunday Business Post

Jaysus - comical Ali would be proud if you could call that a victory for ireland.

The company was trying to get a finnish corpo tax deduction by moving the profit out of the finnish subsidary, into the UK, and paying the lower UK rate of corpo tax on it. Which was prevented by a sensible finnish law, which allows tax deductions only if the money stays in finland (so they’ll get their slice of the money anyway).

Since ireland currently relies on exactly this money movement behaviour (foreign based ‘subsidaries’ moving most of their profits through an irish based ‘headquarters’), this case has left the door open for all the high tax countries to prevent the deduction of money to ireland from locally due tax - thus removing the incentive for moving the money through ireland at all. Expect to see the finnish law replicated across europe within a year or two.

On the CCCTB side, it’s rather obvious that the proposals involve giving up some tax sovereignty - fundamentally it’s about EU countries to agree how to share the tax pie from a company using a set of agreed rules, rather than having every country competing to take each others slice, but with the effect of letting companies keep nearly all.