Will Ireland's corporation tax survive?


#525

13bn is the roughly the amount of money that the CDU/Angela will bribe the electorate with in tax cuts to try to win the next election based on what I heard on the radio yesterday.
In general the people of other European countries pay higher taxes so that multinationals and the low skilled in Ireland don’t have to.


#526

13bn euros in back tax Ireland told to recover from Apple is same as country’s health budget


#527

Could Apple setup a “Vulture fund” and just buy out NAMA or somehow channel their money into Irish property :smiley: and then not pay anything.


#528

Apple is different from MS, Google, Facebook et al and their tax evasion scams. Apple were playing silly buggers, Too clever by half. According to US rules they were not US tax domiciled. According to Irish rules they were not tax domiciled in Ireland. They were a Heisenberg tax entity. Always domiciled somewhere else to wherever you looked.

This is not tax avoidance, this is tax evasion. And the EU ruled against Ireland because it was a state sanctioned competitive advantage, against EU rules. Once the US harmonizes its corporation tax rate with the rest of the western world all this will go away. So the Irish government will be praying for a Hillary win because she plans to give US corps even more reason to do this stuff whereas Trump wants to drop the rates to something sane and finally end all this stupidity. High US corp tax rates have nothing to do with tax revenue and everything to do with Dem party populist class bating. Just electioneering. US corp tax rate revenue has been on a downward curve for the last 30 years (as a percentage of total) due to the massive distortions caused by the current tax rates. If you were a corp like Apple would you pay at least US 45% tax on your net profit? Or almost net US 65% tax on dividend distributions? For all world income.


#529

Correct but the EC knows what the number should be, which is €13bn. If Revenue tried to settle for €100m the EC would just find that Ireland had granted preferential treatment to Apple and force them to levy the balance. Revenue might have a small amount of wiggle room (like maybe they could say it’s €12bn) but they can’t take the piss.


#530

I can’t agree with that. Corporations won’t pay tax rates above 2 to 4 % and corp tax rates won’t drop to that.
As it is they won’t even pay dividends and just do share buy-backs to prevent giving any government or anyone else anything that they can possibly avoid giving. greed is good, miserlieness is better.


#531

Yes exactly. We need to maintain our international reputation as a tax haven. Why else are Google, FB, MS etc creating jobs here? Anything that implies that companies here might have to properly account for the source of their income is to be resisted.


#532

How exactly do the mechanics of Revenue collecting 13 Billion euro actually work?

I presume if they show up at Apple office here they will be told its a Limited company where their bank account in Ireland has zero in it, and the company would simply fold if pushed for payment.

Like the old saying goes when you owe the bank a 1000 its your problem when you owe the bank 13 billion?

And have we guys considered the actual repercussions of the state somehow collecting a windfall such as this? Every single Trade Union in the country will go on strike overnight in order to get their slice of this pie.


#533

It will be years before it’s available to spend as general funds. Until then the NTMA get to play with it. The interesting thing wil be to see what political projects the NTMA are allowed to “invest” it in.


#534

It’ll be funny watching Boyd Barrett and the rest of the PBP/AAA mob foaming at the mouth over this… they’re only too happy to vehemently disagree with the EU over water charges but no doubt they’ll be overwhelmingly in favour of this ruling.


#535

I think pretty much everyone other than FF and FG will be in favour of this ruling. Apple basically paid no tax on everything they sold in Europe because of Irish tax haven status. Other companies had to pay taxes. Of course the ruling is good.


#536

If this results in Ireland’s GDP going off a cliff then we might be back into an excessive deficit procedure (>3% GDP).

We only got out of that hole on 17 June 2016.

eur-lex.europa.eu/legal-content/ … 00&from=EN


#537

I doubt this on its own would cause anything. This was a tax deal specific for Apple; and the double-Irish was closed in 2014. This is more of a marketing thing that might dissuade new companies from locating here. But since the end of the double Irish we’re already less attractive. The moves to make companies pay tax where sales are made is what will kill us ultimately.

Anyway we’ve a good chance of going into recession soon due to the GDP inflation that was going on.


#538

I remember when the Irish corp rate started at 50%. And absolutely every financial decision by Irish companies was predicated by the tax consequences. Even small companies, especially professional services companies, had to create the most complex corporate entities / structures / schemes just to get the tax burden down to something that allowed the company to just to survive. So with enormous effort and wasted energy companies kept their effective tax rate to around the mid / low 20%'s. But what a waste of time and resources.

Then when the corp tax rate was first dropped to mid 20’s % all that crap quickly went away. Companies no longer had to invest huge energy in the most amazing acrobatics just to keep their tax rate reasonable. So all the previous tricks quickly went away and the companies could concentrate their energy on just growing their business.

As Apples tax evasion haul just ends up in immense dead cash piles I dont see why companies like them would not rather just get rid of the cash through single taxed dividends rather than the current issuing debt to finance a stock buy back to transfer the added value to shareholders though capital gains. The most economically counter productive way of transferring the money.

High corp tax rates is purely a political ploy whose only purpose is fermenting class jealousy by populist rabble rousers for political gain. It has no real impact on effective tax rates. In fact it depresses it. As well as a much lower tax revenue. It also wastes an enormous amount of economic activity with no real purpose.


#539

M$, FB and the others are different only in that they didn’t have the special tax exemption that Apple did, but it doesn’t mean they paid any tax here ; many of them used the double Irish until 2014 when it was abolished. I remember when every Windows 95 license in EMEA was “sold from Ireland”.


#540

and we remember the times of double digit inflation too but times change and no multi-national will want to pay more than 2 to 4% in corp tax. That’s the target. That’s the realistic target and if they are not hitting it then questions would be asked.
During the period of time that all this Apple unpaid tax was being accrued Apple were busy heavily investing and by fair means and foul putting competitors like the company I worked for out of business with the money they would otherwise have been paying as tax.


#541

I don’t think so. Apple are not going to sign a check for €13bn or anything like it regardless of what the EU says (or the US treasury for that matter). A settlement will have to be reached and its not going to be in the Billions. Either way my point still stands - I don’t see what Ire has to gain from lodging an appeal. It’s clear (so far) that they won’t win.


#542

and I remember duplicating the W.95 floppy diskettes as a temp worker for a contractor in Sandyford in the times before minimum wage on a three shift cycle earning not much more than dole. People keep saying they deliver jobs but the jobs these companies deliver are mostly low paying; if they were high paying then the balance of taxes in the national accounts would look dramatically different.


#543

Anecdotal tripe.

Median wages in US multinationals are *dramatically *higher than what pertains in indigenous owned firms.


#544

Firstly, quit with the insults
Secondly, wages are only higher because they required trained qualified people to make profits for them which they pay a pittance and ensure are paid a pittance by leaning on the department formerly known as the DETE to keep the Visas coming(generalisation but essentially true).
Indigenous owned firms are coffee shops and landscaping firms(generalisation but essentially true).