Will Ireland's corporation tax survive?


#465

Arab Fiscal Forum: Fiscal Policy and Growth - -> imf.org/external/np/seminars … scalforum/

Revenue Mobilization and International Taxation: Key Ingredients of 21st-Century Economies - Christine Lagarde -> imf.org/external/np/speeches/2016/022216.htm

Now you know why she was re-anointed head of the IMF.


#466

Exactly as I predicted, Facebook to stop booking their UK sales through Ireland. Expect a loss in sales and CSR positions here as well as reduction in GDP (however small).

irishtimes.com/business/tech … -1.2559941


#467

Long term is this bad for Ireland?


#468

It removes some of the fake GDP and reduces PAYI/PRSI. In the short and medium term it’s bad. You could argue that it’s good in the long term because it makes us stop pretending we have a world-class knowledge economy.


#469

I doubt that there will be any significant impact on the number of Irish positions; the revenue to be booked in UK going forward is from the largest UK customers (Tesco etc) who will have been dealing with UK based staff operating on a costs plus or commission base in the past. Any support, billing etc, carried out in Dublin previously will no doubt stay here but the high paid client facing roles for these customers are already in the UK. Booking the revenue there will allow the absorption of some of the UK trading losses carried forward from the past less profitable activities in the UK. The impact on GDP will exist, however.


#470

taxmen are fairly efficient around the world. If they see benefits from this activity of bringing the taxable income to their country they will press all our other multi-nationals to follow suit.
If taxmen from other countries observe then they will follow suit too.

complacency can’t be allowed. GDP drops and debt to GDP ratios balloon and Ireland is back paying 7% on 5 year bonds.


#471

I bow to your superior knowledge of where FB sell to big companies from. I believe they do UK SME stuff from here but maybe the corporate stuff is done from the UK. Hard to know whether they’ll move the CSR/billing function but if the sales are in the UK and the revenue is in the UK I would think they’ll eventually consolidate the other functions there too…

Apart from the particular issue of FB selling to the UK it does point to a shift away from fake selling from Ireland.


#472

It’s more a function of business reality; SMEs do not get the option of bespoke face to face negotiation and customer service; they get boilerplate documentation and a ratecard on a take it or leave it basis. Large corporates have marketing functions who need to(1) justify their existence, (2) be wined/dined/mollycoddled (3) ensure the full product suite is delivered to their mothership (delete as appropriate.

These latter functions have always been located where the large corporates and agencies are based and that is simply not Dublin. The billing and support functions for all clients will, I expect, always remain in Ireland as, in common with financial services, that is always what the service based FDI is all about in Ireland. I’m willing to venture, from cynical experience, that the long term tax take in the UK does not end up being that big. The large revenues will encourage large costs to be allocated to the UK.


#473

Fair enough. And yes. as long as they can take massive expense charges for the intellectual property held in other jurisdictions it’s presumably not going to exactly fill the coffers of the UK. Nice gesture though.


#474

This figure would be higher now I’d imagine.

Just shows how vulnerable we are to any proper US CT reform

rte.ie/news/2016/0404/779503-inversions/


#475

Apple’s tax affairs spark a transatlantic face-off - FT.com on.ft.com/1Vr24xW via @FT

good piece


#476

wsj.com/articles/u-s-treasury-unveils-new-steps-to-limit-tax-inversions-1459803636

Rules targeting Pfizer / Allergan inversion
Seems to increase the required post transaction equity thresholds,
Seems to set aside the benefits of intercompany loans to strip profits out of the US,

Allergan stock down 15% on opening.


#477

Interesting to see how this pans out. If this was directly as a result of the new US rules they made such a big decision extremely quickly.

Perhaps they has advance notice? Or it is just coincidence


#478

Pfizer/Allergan merger is off.


#479

Instantly Ireland becomes less attractive as a base of operation for a company which was going to base here. Imagine if the U.S. Treasury introduces similar type laws to make income taxable from other Multi-nationals already based in Ireland. If they get a taste for easy tax money then they could do anything and Ireland GDP\GNP collapse.
I suppose it really depends on whether the US Treasury works toward the interests of the US Citizen or toward the interests of the US multi-nationals


#480

I wonder how much the merger would have impacted our GDP?


#481

Amazon have announced a London-based AWS datacenter. Presumably this is partially a hedge in case of Brexit but in any case it will lead to fewer services hosting in Ireland.


#482

:stuck_out_tongue: Germany’s corporation tax regime is riddled with exemptions that thoroughly dilute the headline rate.

ft.com/intl/cms/s/0/f046e7c2 … 11a2f.html


#483

I think that’s the case with the French tax regime too.


#484

bloombergview.com/articles/2 … e-taxation