Will Ireland's corporation tax survive?

[jmc]

Lets see who was in power in 1991…

Oh, it was Charles Haughey. Enough said?

The Apple deal in 1991 came about because it had a manufacturing plant in Cork and the Apple of the time was a traditional computer company that had yet to been restructured as a pure law breaking, tax evasion corporation. That happened after Jobs stabbed Amelio in the back and fired everyone who was not a yesman or cult member. MS was the pure law breaking tech company back then. The Apple of the time did engage in some interesting tax maneuvers. I’m thinking of the very expensive CPU’s in suitcases stories. Plus odd things happened in Singapore. But on the whole it was just another computer hardware company with healthy margins, especially on peripherals. Nothing too creative on the tax front.

Jobs (like Gates) was a criminal psychopath, he believed that laws never applied to him, so Apple was restructured in his image. Thats all you need to know about Apple and how it has operated over the last 20 years. My guess is that the '91 deal was not really used as a major conduit for world income until the 2000’s when Apple became a consumer electronics company with unfeasibly large net margins.

There was nothing unusual about the Revenue deal. It happened all the time. If you were a company / entity with high net income and who could relocate your income destination at little cost or disruption then you would get to see the warm cuddly side of Revenue. Where a bunch of the (very) senior guys would turn up to the meeting and would open with “Now what can we do for you? How can we be of help?..” with their most winning smiles.

I’m definitely reaching for the pop corn on this one. With a bit of luck we night even get a RICO out of it. Now that would be fun. Maybe someday the name Jobs will be bracketed with Maxwell as examples of the utterly nasty face of capitalism.

[Mantissa]

Lets see who was in power in 1991…

Oh, it was Charles Haughey. Enough said?

And we had three Finance ministers in 1991:

• Albert Reynolds
• Charlie Haughty (acting)
• Bertie Ahern

And then when it was renewed in 2007:

• Brian Cowan

Yep, enough said!

[jmc]

Lets see who was in power in 1991…

Oh, it was Charles Haughey. Enough said?

And we had three Finance ministers in 1991:

• Albert Reynolds
• Charlie Haughty (acting)
• Bertie Ahern

And then when it was renewed in 2007:

• Brian Cowan

Yep, enough said!

Is that four of a kind or a royal flush?

[obese_cat]

Lets see who was in power in 1991…

Oh, it was Charles Haughey. Enough said?

And we had three Finance ministers in 1991:

• Albert Reynolds
• Charlie Haughty (acting)
• Bertie Ahern

And then when it was renewed in 2007:

• Brian Cowan

Yep, enough said!

I was wondering why FF were being abnormally quiet on this!

[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.