Will Ireland's corporation tax survive?

[yoganmahew]

Another simpleton question

Noonan & FG are repeating that Apple did not get a special deal

Does the EU ruling completely contradict this is (i.e. they’re lying) or are they deliberately using semantics to avoid it technically being a lie?

It is a lie at every level. Revenue agreed to calculate their tax based on their expenses rather than their profits. This is unheard of as far as I know.
Well, no, that’s not the way I understand it - I think there are two elements - the stateless corporation (Apple not HQ’d in Ireland, so profits outside Ireland are not taxed in Ireland, but in country of HQ. That there was no HQ, not Ireland’s business - that appears to be the main source of Ireland’s defence). Second - the whole “what’s a profit anyway” thing - this is a much wider issue and is at the heart of the headquartering in Ireland, I think this is what the EU are really after and where the Revenue are on ropey ground.

But I haven’t been paying that much attention; my yellow-pack MNC job is keeping me busy

Prepare to be amazed:

In 1991, a basis for determining Apple Computer Ltd.’s (subsequently AOE’s) Irish branch net profit was proposed by Apple and agreed by Irish Revenue. According to that ruling, **the net profit attributable to the AOE branch would be calculated as 65% of operating expenses **

up to an annual amount of USD [60- 70] million and 20% of operating expenses in excess of USD [60-70] million. This was subject to the proviso that if the overall profit from the Irish operations was less than the figure resulting from this formula, that lower figure would be used for determining net profits.

Quite unprecedented AFAIK.

Wow

[FreeFallin]

The Irish Times, as predicted!

John McManus: Why we have no right to spend Apple’s €13bn
The money does not belong to us and we should give it back to its owners
irishtimes.com/opinion/john- … -1.2774603

Editorial:
EU decision on Apple: Are we defending the indefensible?
In the absence of standardisation of rates or tax bases, the state aids inquiry is a clumsy, blunt mechanism
irishtimes.com/opinion/edito … -1.2774625

[GameBlame]

I watched Six One there.
The EU commissioner was a bit disingenuous saying that a company without staff or operations can’t have Revenue. She knows full well that patent company’s exist.

Richard Bruton was very very weak when giving his view ‘EC can’t act as judge jury executioner’. I’d hate to see him up against her in any intellectual battle.

We urgently need someone outside the echo chamber to independently review what Revenue, MNC and the Big 4 have been up to.

Has the simple word ‘Fraud’ been used yet ?
Ireland is like a Liberian registered oil tanker. Getting approval from our government and revenue has precisely f**k all moral weight.

Brian Hayes is furiously back peddling now saying ‘these are legacy issues’ ‘Noonan changed the rules’

[Blindjustice]

There is probably a ton highly experience people in EU trading law located in London who could be used after the Brexit

[FreeFallin]

From today’s IT:

Sir, – On one or two occasions over the last 40 years of paying tax, I received small refunds due to overpayment. I never appealed this to the Revenue. It wouldn’t have felt right. – Yours, etc,
GEOFF SCARGILL,
Bray, Co Wicklow.

[satechi]

The money does not belong to us and we should give it back to its owners

Well if no one wants the money i would be happy with 0.05% of it

[Skippy_3]

There is an assumption here of some big political-administrative-corporate nexus here.

It is not how it works.

The government sets tax policy, and leaves it to Revenue to *implement *it.

No one can give Revenue a call (not the Minister, not the head of the IDA) and be told how much *any *firm pays in tax.

This is not how it works in many countries, but Ireland but taxpayer confidentiality is taken incredibly seriously at all levels in Revenue.

[grumpy]

If you really think that is how things work here, you are being naive.

[observer35]

There is an assumption here of some big political-administrative-corporate nexus here.

It is not how it works.

The government sets tax policy, and leaves it to Revenue to *implement *it.

No one can give Revenue a call (not the Minister, not the head of the IDA) and be told how much *any *firm pays in tax.

This is not how it works in many countries, but Ireland but taxpayer confidentiality is taken incredibly seriously at all levels in Revenue.

Eh. this guy would agree with you.

[Col_Max_Pyatnitski]

If you really think that is how things work here, you are being naive.

+1
I’ll admit it is how it’s supposed to work, and how it’s said to work. However, I would have no reason to be confident that that is in fact how it works, and the track record around things like bank regulation etc., support that skepticism.

No one can give Revenue a call (not the Minister, not the head of the IDA) and be told how much any firm pays in tax.

This is not how it works in many countries, but Ireland but taxpayer confidentiality is taken incredibly seriously at all levels in Revenue.

If I was either a Minister or an IDA official and wanted to know how much a firm pays in tax in order to help them out, the obvious place to get that information is from the firm itself.

[Mantissa]

EC proposes mandatory consolidated tax rules for large companies

rte.ie/news/business/2016/10 … tax-rules/

[dipole]

You have to give Ireland opportunities to openly display their contempt for their partners in the E.U. before you can move against them. This is one of those opportunities.
At present it is business as usual.
Would the big German and French companies really miss the trade they do with Ireland.
Is there any common infrastructure policy that depends on a country on the periphery that warrants the leakage of trillions of taxable activity in the greater E.U.

[BoyRacer]

There are other taxes in the pipeline.

German Parties Vying in Elections Differ on Domestic Taxes - -> bna.com/german-parties-vying-n57982088239/

Germany’s two major parties have different visions for Germany’s domestic tax policy: Chancellor Angela Merkel’s conservative Christian Democrats (CDU) and their Bavarian sister party, the Christian Social Union, want no tax hikes. The center-left Social Democrats do.

But the two parties who are heading into Sept. 24 elections agree when it comes to Germany’s role in combating VAT non-compliance vis-a-vis international cooperation. Attorneys, tax advisers and lawmakers told Bloomberg BNA that the parties likely will reunite in a repeat of the so-called Grand Coalition that has governed Germany for eight of the past 12 years because neither is predicted to receive an outright majority.

While some are disappointed with the lack of innovation at the domestic level that could potentially expedite an international crackdown on shady e-commerce practices, others say that staying the course during the next legislative period and working transnationally to combat tax evasion is a radical move in and of itself

there is more

E-commerce platforms face new VAT liability rules - -> euractiv.com/section/digita … ity-rules/

Online retailers such as Amazon could come under tighter scrutiny and be forced to collect VAT from companies whose items they sell, according to new changes that EU member states made to a draft bill.

E-commerce platforms could face new regulations that would make them legally responsible if they sell products from companies that do not pay value-added tax. A majority of diplomats from EU countries have already backed changes to the bill, according to a working document obtained by EURACTIV.com.

Amazon has warehouses in Italy, Germany, the Czech Republic, France, Spain, Poland and the UK.

The European Commission did not include new liability rules to apply to online platforms when it proposed the VAT overhaul in December 2016. All member states, the European Parliament and the Commission must agree on the bill before it can go into effect.

Other industry sources suggested that online retailers that are based outside the EU and do not have warehouses in the bloc could be given an advantage under the proposed rules. They might be able to ship items to an address in a member state but will not be held liable for collecting VAT on behalf of the companies that made the product.

Online shopping is becoming more common in the EU. 55% of shoppers aged 16-74 had shopped online in the last year, according to 2016 Eurostat figures. 89% of those shoppers bought from retailers in their home member state, while 20% purchased from sellers outside the EU.

there is more

Netflix, YouTube to Pay Tax on Turnover in France Under New Law - -> variety.com/2017/film/global/net … 202565236/

The European Commission has greenlit a long-gestating French draft measure to have foreign streaming services such as Netflix and video-sharing websites such as YouTube that distribute content in France but are not fiscally established there pay a 2% tax to France’s National Film Board.

Upon receiving the European Commission’s approval, the French government signed a decree Thursday to enforce the new measure. The 2% tax will be levied on revenues made in France from subscriptions, in the case of Netflix, and from advertising, in the case of YouTube.

The money will be used by the film board, known as the CNC, to help finance French original content, from movies to TV series, video games and digital programs, via subsidies. The CNC expects to receive 2 million euros ($2.4 million) from Netflix and 2.5 million euros ($3 million) from YouTube, according to a source at the organization.

there is more

[slasher]

irishtimes.com/business/eco … -1.3497421

shock to the State’s corporation tax base, which generated a record €8 billion last year, is more or less inevitable, economist Seamus Coffey has warned.

He said receipts from the business tax were likely to fall at some point in the future because they were “inherently” volatile and highly concentrated around a small number of firms.

[TheJackal]

Ireland is the world’s biggest corporate ‘tax haven’, say academics

irishtimes.com/business/eco … -1.3528401

Ireland is the biggest “tax haven” in the world used by multinationals to shelter profits, according to a new study by economists from the United States and Denmark.

The research from academics at the University California, Berkeley and the University of Copenhagen estimates that foreign multinationals shifted $106 billion (€90 billion) of corporate profits to Ireland in 2015.

This was more than all of the islands of the Caribbean combined ($97 billion/€83 billion), and well ahead of Singapore ($70 billion/€60 billion), Switzerland ($58 billion/€49 billion) and the Netherlands ($57 billion/€48 billion), according to the researchers.

[TheJackal]

Dublin-based tech firm relocates to US due to Trump’s ‘favourable’ tax changes

irishtimes.com/business/tec … -1.3612765

Afilias, a Dublin-headquartered company that manages hundreds of millions of internet addresses, is to relocate to Pennsylvania due to “favourable” tax changes recently introduced by US president Donald Trump.

He signed the overhaul of the US tax regime into law on December 22nd, cutting the corporate tax rate from 35 per ent to 21 per cent.

Earlier this year it was reported that Apple was pulling back on its investments in the corporate bond market as it prepares to repatriate billions of dollars in overseas cash under the Trump tax cuts. However, Afilias, is the first known company headquartered in Ireland to relocate on the back of the tax changes.

[yoganmahew]

Some interesting tax measures coming into law this year and next.
rte.ie/news/business/2018/1 … avoidance/

New EU corporate tax avoidance measures to take effect

[Epicurus]

EU Presidential debate hears call for minimum 18% corporation tax rate

A debate among the lead candidates for the presidency of the European Commission has heard a call for a minimum 18% corporation tax rate across the EU.

The call from the European Regulation Commissioner Frans Timmermans for the 18% minimum level would have serious implications for Ireland, where the corporation tax rate is currently is 12.5%.

The proposal was made in a live television debate from Brussels tonight which was screened for millions of people across Europe.

As the six candidates for the role of President of the European Commission made their pitch for one of top jobs in European politics, the European Competition Commissioner Margrethe Vestager also increased the pressure on Ireland by saying "We need to put a floor under corporate taxation as such, because otherwise, it will just be a race to the bottom."

The Presidency of the Commission goes to the candidate of the political party capable of marshalling sufficient parliamentary support.

Ms Vestager, who is the lead candidate for the Alliance of Liberals and Democrats for Europe (ALDE) said the presenter was “very generous when he said that some only pay 5% because some pay 0.05% in some years as we saw within the Apple case”.

She acknowledged that taxation has been changed in Ireland, the Netherlands, Belgium, Malta and Cyprus “because change is coming”.

She stressed the need for digital taxation as a lot of these companies are escaping while most companies do pay their taxes and this is “unfair”.

https://www.rte.ie/news/politics/2019/0515/1049755-european-comission-presidency-debate/

Saw this was on France 24/Euronews. Hadn’t seen them do this before. No doubt it’s to appease euro sceptics and convince the public they get their little say in the election of the President. Once Britain is fully chastised for it’s attempt at breaking from the club, and the elections are out of the way, we can maybe expect a more aggressive stance on Corp tax, and action on the digital taxation Macron has been flagging up for some time now.

[macannrb]

what does digital taxation mean? I assume it is a way to tax the googles, facebooks etc, but how is this different corporate tax in the way we think about it?

[Epicurus]

Macron Aims to Force ‘Tax Justice’ on Facebook, Google and Apple

French lawmakers will start debating on Monday a tax meant to force Internet giants like [Amazon Inc.] and [Facebook Inc.] to pay a 3 percent levy on digital turnover.

Parliament will discuss the tax, which targets companies with 750 million euros ($842 million) in worldwide revenue and 25 million euros of French digital sales, over the next several weeks. The levy, described by Finance Minister Bruno Le Maire as ensuring “fiscal justice”, is expected to become effective starting Jan. 1.

French President Emmanuel Macron got support from the European Union’s competition chief Margrethe Vestager, who has imposed major fines on companies including Apple Inc. and Alphabet Inc. In an interview with France Inter on Monday, she said the best solution for taxing large Internet companies was to start in Europe.

“The best thing is a global solution, but if we want solutions in a reasonable time, then Europe must step forward,” said Vestager, who is in Paris and plans to meet with Macron’s chief of staff. “France is showing the way.”

Details on the proposed French tax:
**> **
> * The tax is due in April of each year, and is to be paid in two installments. In 2019, both installments will be due in late October, according to the bill.
> * The French government will tax online marketplaces, the sale of data for targeted advertising, and the sale of targeted online advertising.
> * The tax is to be pro-rated based on the number of users companies have in France, but there is no information about how this would be calculated.
> * Activities that won’t be taxed are direct e-commerce retailing, messaging or payment apps, and online advertising that doesn’t involve user data.
> * Companies will be allowed to offset the tax against French corporation tax.
> * The government said the tax will be an interim measure applied until a global consensus on taxing the digital economy is reached.
> * The measure is expected to bring in 500 million euros annually.
> * Lawmakers in Macron’s government are considering 3-year sunset clause.

https://www.bloomberg.com/news/articles/2019-04-08/macron-aims-to-force-tax-justice-on-facebook-google-and-apple

This can be offset against French Corp tax, but presumably their argument is that Amazon, Google, facebook etc. are currently paying little in French Corp tax