tax & the Lisbon vote

schott

I work for a large US company.....they have about 3000 workers in Ireland alone. One of the main reasons they are here is because of tax breaks Ireland gives to these groups. if we vote yes....will this change??? will they take there factorys to china or the likes???

optocynic

schott wrote: »

I work for a large US company.....they have about 3000 workers in Ireland alone. One of the main reasons they are here is because of tax breaks Ireland gives to these groups. if we vote yes....will this change??? will they take there factorys to china or the likes???

Well, ask your CEO. He will tell you the opposite!
Alienation from Europe... or a political 'cold-shoulder' will damage our position and stability!

Long Onion

Nothing in Lisbon will alter the fact that matters of domestic taxation will remain within the remit of the Irish Government - all you have to worry about on that front is Eamon Gilmore.

Biggins

I know France, Germany and Spain can't wait to see us further integrated into the EU.
They have been complaining about our advantageous tax laws and how "unfair" they are to their countries!

Some say we have "guarantees" that will come into play six months to a year from now - but 'they' have yet to put that in legally binding writing and added as an amendment to the Lisbon Treaty!
Until then, the bullies of Europe are only quietly delighted to see that we will be tighter regulated under further EU dictates and brought into line and told what to do!

Vorsprung

Biggins wrote: »

I know France, Germany and Spain can't wait to see us further integrated into the EU.
They have been complaining about our advantageous tax laws and how "unfair" they are to their countries!

Some say we have "guarantees" that will come into play six months to a year from now - but 'they' have yet to put that in legally binding writing and added as an amendment to the Lisbon Treaty!
Until then, the bullies of Europe are only quietly delighted to see that we will be tighter regulated under further EU dictates and brought into line and told what to do!

Just out of interest, what is stopping those countries from lowering their Corporation tax rate?

Long Onion

Under existing EU treaties, taxation matters are decided by unanimity - any one member state can block a proposal. Taxation is an area jealously guarded by nation states. It was one of the two absolute red line issues for Ireland during the negotiations for the Lisbon Treaty and its stillborn close relative, the EU constitution. (The other Irish red line was on defence).

In the Lisbon Treaty taxation continues to be a unanimity measure, where every country has a veto on tax policy. So whether Lisbon is accepted or rejected by the Irish electorate, it will not change the legal position on tax policy. The veto stays.

eoinbn

Vorsprung wrote: »

Just out of interest, what is stopping those countries from lowering their Corporation tax rate?

Anyone else think it's funny that everyone in Ireland is saying "Tax the rich, don't tax/cut me", but when someone suggests raise the tax on companies that make billions everyone turns arounds and says "NO, I want to keep my job!"

To answer your question, don't you think it's somewhat immortal to tax someone on €40k at nearly 50% but a company earning €10b at 12.5%? Just look at our banks over the boom years- billions in profits and the country has nothing to show for it, nothing positive anyway!

OP: No, nothing will change. At some stage we probably will see an agreement on guidelines for corporation tax but that could happen with or without Lisbon

Vorsprung

eoinbn wrote: »

To answer your question, don't you think it's somewhat immortal to tax someone on €40k at nearly 50% but a company earning €10b at 12.5%? Just look at our banks over the boom years- billions in profits and the country has nothing to show for it, nothing positive anyway!

It doesn't really to be honest! I made no comment on the morals or otherwise of corporation tax. I was just curious to know why other large EU countries haven't followed suit.

Riskymove

Vorsprung wrote: »

Just out of interest, what is stopping those countries from lowering their Corporation tax rate?

nothing technically

however, they may have decided to have a better economic plan than to have a large chunk of their industry based on competing to have mobile manufacturing move here in the hope they wont eventually bugger off to the next cheap place

Biggins

Vorsprung wrote: »

It doesn't really to be honest! I made no comment on the morals or otherwise of corporation tax. I was just curious to know why other large EU countries haven't followed suit.

...and its a good question. One I'm interested myself in.

eoinbn

Vorsprung wrote: »

It doesn't really to be honest! I made no comment on the morals or otherwise of corporation tax. I was just curious to know why other large EU countries haven't followed suit.

It's pretty obvious. If every country has low corporation tax then there is no advantage in having low corporation tax, in fact all it would do is lower the tax intake of the countries involved.

Long Onion

I think it's really a case that we need FDI more than many (not all) other EU states. There is nothing stoppin the like of Germany from lowering their corporation tax rate, but it would have to be worthwhile.

They have, I presume, had a look at the current revenues generated from existing corporations established in the state, looked at how much a drop to 12.5% would cost them, projected how much new business would be attracted (given the cost of business there - remember even if they matched the rates, they would be in competition with many of the accession states for production costs etc) and have decided that it is not worth it.

In Ireland, we do not have the same degree of domestic industry so we would be in a massive pickle without it (more misguided policy by successive governments to land us here in the first place), when you look at our high cost base, we have to find another way to be attractive - corporation tax is the most obvious way, followed by generous IDA grants (which may be under threat from the EU) and possibly the fact that we speak english (this has benefits re FDA approval for medical devices, pharamceutical products etc)

I should probably add that the debate in Europe is not so much about hamonising the corporate tax rates as it is about harmonising the corporate tax base. It is mainly concerned with how the taxable profits of a company are calculated, and because every state allows companies to write-off different things at different rates when arriving at their pre-tax profit figure, it means it is very hard to compare like with like. Corporate profit in Ireland is different to corporate profit in Germany, which is different to corporate profit in Romania. If the basis on which taxable profit is calculated is different, then the difference in the tax rates applied to that profit becomes less meaningful for comparing the actual tax charge on companies operating in different states.

Proponents of the system say it will increase transparency and make it easier to eliminate what they call 'harmful or unfair' tax policies. Opponents say it is unworkable, that it will drive business away from Europe, and lead to higher tax rates. Worst of all, they say it will lead to a harmonised single tax rate for business right across the EU.
Win, lose or draw on the Lisbon referendum, this issue is still going to be out there, and is not going to go away anytime soon. Many believe it is not going to make it as an EU policy, because the current system suits too many governments and companies, both of whom see advantages in a lack of transparency. In the Irish case, it is hard to see a change in Government policy, unless the multinational companies see advantages in a harmonised system: if they threaten to pull out of Ireland because it is not using CCTB, then expect a change. But right now there is no sign of that, because this draft directive has not even been published, let alone put into action.

Vorsprung

Long Onion wrote: »

I think it's really a case that we need FDI more than many (not all) other EU states. There is nothing stoppin the like of Germany from lowering their corporation tax rate, but it would have to be worthwhile.

They have, I presume, had a look at the current revenues generated from existing corporations established in the state, looked at how much a drop to 12.5% would cost them, projected how much new business would be attracted (given the cost of business there - remember even if they matched the rates, they would be in competition with many of the accession states for production costs etc) and have decided that it is not worth it.

In Ireland, we do not have the same degree of domestic industry so we would be in a massive pickle without it (more misguided policy by successive governments to land us here in the first place), when you look at our high cost base, we have to find another way to be attractive - corporation tax is the most obvious way, followed by generous IDA grants (which may be under threat from the EU) and possibly the fact that we speak english (this has benefits re FDA approval for medical devices, pharamceutical products etc)

Thanks, that makes sense alright

sceptre

Moved from Politics to European Union. Also changed the thread title from "tax" to "tax & the Lisbon vote" to better reflect what the question is about.

Amhran Nua

Riskymove wrote: »

however, they may have decided to have a better economic plan than to have a large chunk of their industry based on competing to have mobile manufacturing move here in the hope they wont eventually bugger off to the next cheap place

They had a considerably stronger starting point though. For what we were handed here we did alright out of it.

eoinbn wrote: »

To answer your question, don't you think it's somewhat immortal to tax someone on €40k at nearly 50% but a company earning €10b at 12.5%?

If you want to keep your 40k to be taxed (and where are you getting 50% from by the way?) we hang onto the 12.5%

gurramok

Help reduce our cost base, lower industrial electricity. Its one of the highest in the EU though I think this is being actioned to be lowered, too late maybe.

marco_polo

Biggins wrote: »

Some say we have "guarantees" that will come into play six months to a year from now - but 'they' have yet to put that in legally binding writing and added as an amendment to the Lisbon Treaty!

So much fatually incorrect information in such a tiny paragraph.
Red Herrings++

8-10

eoinbn wrote: »

don't you think it's somewhat immortal to tax someone on €40k at nearly 50%

Immortal = everlasting life. That's gonna end up some tax bill!

eoinbn

Amhran Nua wrote: »

If you want to keep your 40k to be taxed (and where are you getting 50% from by the way?) we hang onto the 12.5%

The higher tax band+income levies puts you at very close to 50% of your income between tax at €40k+.

I understand why we have, and currently need a lower corp. tax, but I find it assuming to see people keep a straight face calling when calling for taxes on the weathly and tax exciles when we as a country help many companies avoid billions in tax. Take the 'No' campaign for example- many people on the no side are very left wing and say it's a pro business, anti-worker treaty, yet one of the main arguement's that they used in the first referendum was that voting yes would mean that we would have to raise corp. tax!

free-man

marco_polo wrote: »

So much fatually incorrect information in such a tiny paragraph.
Red Herrings++

What he's saying is more or less correct. There will not be a protocol on this until the next accession treaty until then it is a declaration - there's a whole other thread on the difference.

Now to give some perspective.

I used to be of the opinion that Lisbon allows Europe to influence our tax rate. The article that everyone is worried about clearly relates to indirect tax which does not mean corporation tax - thanks to the posters here

This doesn't mean I am not concerned. Judging by the way our government is selling us out with the developers etc it is not too hard to see all of Europe voting for Ireland to increase their tax and the government going along so as not to lose 'influence' or so we can remain 'at the heart of europe' or so it will 'create jobs'.

I'm still not entirely convinced that there is not a legal loophole somewhere in the treaty on the tax matter.

Schott - I would read up on this more and not just post on this site as 90% of the posters appear to be on the Yes side. I'll be reading up more on the tax situation today.

A good blog I have been following is here:

The issue of the Corporation Tax rate and of a Common Consolidated Corporate Tax Base is absolutely crucial to Irish jobs.

oscarBravo

free-man wrote: »

I used to be of the opinion that Lisbon allows Europe to influence our tax rate. The article that everyone is worried about clearly relates to indirect tax which does not mean corporation tax - thanks to the posters here

This doesn't mean I am not concerned. Judging by the way our government is selling us out with the developers etc it is not too hard to see all of Europe voting for Ireland to increase their tax and the government going along so as not to lose 'influence' or so we can remain 'at the heart of europe' or so it will 'create jobs'.

I'm still not entirely convinced that there is not a legal loophole somewhere in the treaty on the tax matter.

Is there some part of "direct taxation is not an EU competence" that you find ambiguous?

"All of Europe" can't vote on something that isn't an EU competence. End. Of. Story.

Scofflaw

free-man wrote: »

What he's saying is more or less correct. There will not be a protocol on this until the next accession treaty until then it is a declaration - there's a whole other thread on the difference.

Now to give some perspective.

I used to be of the opinion that Lisbon allows Europe to influence our tax rate. The article that everyone is worried about clearly relates to indirect tax which does not mean corporation tax - thanks to the posters here

This doesn't mean I am not concerned. Judging by the way our government is selling us out with the developers etc it is not too hard to see all of Europe voting for Ireland to increase their tax and the government going along so as not to lose 'influence' or so we can remain 'at the heart of europe' or so it will 'create jobs'.

I'm still not entirely convinced that there is not a legal loophole somewhere in the treaty on the tax matter.

There are three articles only that are changed in Lisbon and which even mention tax: 65 TFEU, 113 TFEU, and 173 TFEU. The first deals only with the application of 'restrictive' tax measures to non-EU countries. The second is on the harmonisation of indirect taxes. The third precludes EU industrial policy initiatives from including tax provisions.

That's it - you can check what I'm saying here.

cordially,
Scofflaw

free-man

Scofflaw wrote: »

There are three articles only that are changed in Lisbon and which even mention tax: 65 TFEU, 113 TFEU, and 173 TFEU. The first deals only with the application of 'restrictive' tax measures to non-EU countries. The second is on the harmonisation of indirect taxes. The third precludes EU industrial policy initiatives from including tax provisions.

That's it - you can check what I'm saying here.

cordially,
Scofflaw

Like I said, I don't claim to be an expert on tax and lisbon and I'm able to admit that the Yes posters changed my opinion on that distortion of competition claim.

That said, i reserve the right to be skeptical, and will be doing more research today on this. Thanks for your links, I'll check them out.