MEPs attack Irish corporate tax rate

nordisk celt83

I'm becoming very seriously eurosceptic in recent months. Whatever tax rates sovereign countries choose to follow should be totally at their own discretion.
Also, there really needs to be some perspective here. Do these MEP's realise that a a great number of EU/European countries have lower corporation tax rates than Ireland??? Cyprus and Romania or Bulgaria come to mind, and Estonia has a corporate tax rate of 0%.
These countries are not being overrun with investors.
So, why the bitter resentment towards Ireland's sovereign right to set taxes at whatever levels it sees fit???? It's only worth €3billion annually, which is scraps in a European context. It's utterly bizzare and screams of eurocrat attempts to put upstarts under the thumb.

K-9

Mike 1972 wrote: »

Wasnt there originally a 10% tax rate which was increased -following pressure from Europe to 12.5 % ?



An educated work force (TM) who still unquestioningly swallow all the propaganda about how even a modest increase in corporate tax rates would herald the end of the world.

Think there was a 0% initial rate when the IFSC was set up as well.

AFAIK, there has to be one corporation tax rate.

Other countries have lower rates or not too far above ours.

dlofnep

K-9 wrote: »

Other countries have lower rates or not too far above ours.

Most are between 20-30%. Britain for example is 28%. Holland is 25.5%. Italy is over 31%.

There's a good list on wikipedia for global corp tax rates: http://en.wikipedia.org/wiki/Tax_rates_around_the_world

K-9

dlofnep wrote: »

Most are between 20-30%. Britain for example is 28%. Holland is 25.5%. Italy is over 31%.

There's a good list on wikipedia for global corp tax rates: http://en.wikipedia.org/wiki/Tax_rates_around_the_world

Yeah.

Cyprus and Hungary have 10%, Latvia and Lithuania 15%, Romania 16%.

The mean seems to be in the 20-25% range.

Again though, it isn't really the rate that is the key:

Google saved $3.1bn in taxes in past 3 years using 'Double Irish ' scheme; Google has paid no tax in UK since 2007 - - one of its biggest overseas markets

Bloomberg reported on Thursday that Google cut its taxes by $3.1bn in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. It has paid no taxes in the UK since 2007 even though it is one of its biggest overseas markets.

Bloomberg said Google’s income shifting -- involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” -- helped reduce its overseas tax rate to 2.4%, the lowest of the top five US technology companies by market capitalization, according to regulatory filings in six countries.



Revenues from the United Kingdom totaled $840m in the third quarter - - representing 12% of revenues -- but the US firm paid no corporate taxes in the UK even though it has 850 employed there.
Income from selling advertising on Google's UK website goes straight to its Irish subsidiary.


The London Independent says the latest filing by Google UK at Companies House in London shows that "administrative expenses" rose by £21.6m, eclipsing an increase of £19.8m in revenue and resulting in a loss of £9.7m. The losses were due in part to the increased costs of stock-based compensation, it is understood.

Earnings moved from Ireland and the Netherlands wind up in island havens that levy no corporate income taxes at all.


Bloomberg says Eoin Dorgan, a spokesman for the Irish Department of Finance, declined to comment on Google’s strategies specifically. “Ireland always seeks to ensure that the profits charged in Ireland fully reflect the functions, assets and risks located here by multinational groups,” he said.


This is a ludicrous statement given that 2 of Ireland's biggest companies are based at a Dublin law firm and are owned by software giant Microsoft. They are used to collect funds from other overseas units including income.

mconigol

Why is the corporate tax rate such a sacred cow???

I decided to do some quick calculations using the "Taxes in Europe Database"

Not having much time I only really looked at 2008.

Based on my calculations (which I accept may be wrong ):

2008 Taxable Corporate Income was: €40.57 Billion
This generated tax revenues of: €5.07 Billion

Surprisingly I found that if we were to increase our corporate tax rate to 25%:
Taxable Corporate Income could drop to EXACTLY 50% of 2008 levels and we would still recoup €5.07 Billion. EXACTLY the same as in 2008. This in my opinion would be a worse case scenario......

So again I ask, Why is our corporate tax rate such a sacred cow?? A slightly higher rate could be entirely justifiable in my opinion.

I haven't taken capital gains income into account here either. I'm not stupid and I do acknowledge that a large drop in taxable corporate income would probably mean massive unemployment which would have knock on effects elsewhere in the tax-net however a modest increase in our corporate tax rate could possibly be offset by a small reduction in the minimum wage (as is already coming) and investment of the extra revenue gained being ploughed back into improving infrastructure, education and reducing the cost of doing business in Ireland. This in turn would benefit industry and hopefully encourage foreign businesses to remain. Just a thought

opinion guy

Frankly I don't give a fiddlers if Google sent their planet wide income thru Dublin and only employ a janitor and three IT geeks - 10% of Google's income is a **** load of cash in our economy we wouldn't have otherwise

Sykk

mconigol wrote: »

Why is the corporate tax rate such a sacred cow???

I decided to do some quick calculations using the "Taxes in Europe Database"

Not having much time I only really looked at 2008.

Based on my calculations (which I accept may be wrong ):

2008 Taxable Corporate Income was: €40.57 Billion
This generated tax revenues of: €5.07 Billion

Surprisingly I found that if we were to increase our corporate tax rate to 25%:
Taxable Corporate Income could drop to EXACTLY 50% of 2008 levels and we would still recoup €5.07 Billion. EXACTLY the same as in 2008. This in my opinion would be a worse case scenario......

So again I ask, Why is our corporate tax rate such a sacred cow?? A slightly higher rate could be entirely justifiable in my opinion.

I haven't taken capital gains income into account here either. I'm not stupid and I do acknowledge that a large drop in taxable corporate income would probably mean massive unemployment which would have knock on effects elsewhere in the tax-net however a modest increase in our corporate tax rate could possibly be offset by a small reduction in the minimum wage (as is already coming) and investment of the extra revenue gained being ploughed back into improving infrastructure, education and reducing the cost of doing business in Ireland. This in turn would benefit industry and hopefully encourage foreign businesses to remain. Just a thought

Intel, HP, Facebook, Google.. etc. have no reason to be here only for the corporate tax rate. Large companies would pack up shop and move to a better place.

opinion guy

Sykk wrote: »

Intel, HP, Facebook, Google.. etc. have no reason to be here only for the corporate tax rate. Large companies would pack up shop and move to a better place.

Narnia ?

K-9

opinion guy wrote: »

Frankly I don't give a fiddlers if Google sent their planet wide income thru Dublin and only employ a janitor and three IT geeks - 10% of Google's income is a **** load of cash in our economy we wouldn't have otherwise

Doesn't bother me either.

Might bother a few Brits, Germans etc. though, bit like Bono paying taxes in the Netherlands pisses off loads of Irish people.

opinion guy

K-9 wrote: »

Doesn't bother me either.

Might bother a few Brits, Germans etc. though, bit like Bono paying taxes in the Netherlands pisses off loads of Irish people.

Ah if it keeps Paul Hewson from trying to lecture us on the economy then its a price worth paying

mconigol

Sykk wrote: »

Intel, HP, Facebook, Google.. etc. have no reason to be here only for the corporate tax rate. Large companies would pack up shop and move to a better place.

Well if we were to increase to 16% the only cheaper economies would be:

Romania 16%
Latvia 15%
Lithuania 15%
Cyprus 10%
Bulgaria 10%

16% would be a 33% increase in corporate tax revenue which would amount to approximately an extra €1.5 billion in income to the state.

I still think we would be in a very good position to compete with any of these countries considering our tax and legal system is specifically setup to make it easy for these companies to channel funds through Ireland regardless of our corporate tax rate.

I've worked for Intel....they will pack up shop whenever they feel like it regardless of what our tax rates are as would the others. We have an educated, english speaking workforce which should still be a huge draw. I just think we should be aiming to offer companies more than just a low corporate tax rate - of course we should have been preparing for this years ago!

Absurdum

Germany and France can **** off.

Amhran Nua

th3 s1aught3r wrote: »

Seriously though. I guess from a German perspective they are bailing us out and why should we be allowed an unfair advantage on them ?

Are they? Last time I checked, the bondholders were largely German and UK banks, so in reality they are bailing out their own banks, and making us pay 4% over the odds for the trouble. Oh and lets not forget we'll also be paying one euro in five in taxes on interest alone (which is at least better than the 80s, according to government sources. I weep.) to ease market concerns about Portugal and Spain.

Mike 1972 wrote: »

An educated work force (TM) who still unquestioningly swallow all the propaganda about how even a modest increase in corporate tax rates would herald the end of the world.

Maybe you feel cavalier about playing Russian roulette with half a million jobs, but most people would take a more restrained viewpoint.

mconigol wrote: »

I decided to do some quick calculations using the "Taxes in Europe Database"

Did you calculate the amount of income tax, VAT, employers' PRSI contributions and so on that the ~400,000 people more or less directly employed by FDI pay as well? It comes to a lot more than €5 billion. In fact, you could say that we're looking down the barrel of 50% unemployment rates, joining the illustrious ranks of countries like Zimbabwe and Zaire.

Make no mistake, these individuals:

Jean-Paul Gauzes (EPP), Udo Bullmann (S&D), Sylvie Goulard (ALDE), Sven Giegold (Greens/EFA), Burkhard Balz (EPP), Leonardo Dominici (S&D), Wolf Klinz (ALDE) and Pascal Canfin (Greens/EFA).

are no friends to this country.

Pherekydes

Craebear wrote: »

**** em. Lets leave the EU. If that fails, emigrate to Norway.

Norway's corporation tax is 28%.

Amhran Nua

K-9 wrote: »

Bloomberg reported on Thursday that Google cut its taxes by $3.1bn in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda. It has paid no taxes in the UK since 2007 even though it is one of its biggest overseas markets.

Did Bloomberg also report that Google employs almost two thousand people in Ireland in well-paying jobs, bringing total annual revenue easily to over fifty million euros?

Run_to_da_hills

whiskeyman wrote: »

The politics forum is thataway...

Its too easy to get an infection in Politics.

When your down they will kick ya and this is exactly how the EU bullying tactics operate.

Fcuk them. I just hope Cowen and his crew dosn't cave in on this one before they get booted out. This is perhaps our last trump card we have to offer to foreign companies wishing to remain here.

mconigol

[QUOTE=Amhran Nua;69311181
Did you calculate the amount of income tax, VAT, employers' PRSI contributions and so on that the ~400,000 people more or less directly employed by FDI pay as well? It comes to a lot more than €5 billion. In fact, you could say that we're looking down the barrel of 50% unemployment rates, joining the illustrious ranks of countries like Zimbabwe and Zaire.

Make no mistake, these individuals:

Jean-Paul Gauzes (EPP), Udo Bullmann (S&D), Sylvie Goulard (ALDE), Sven Giegold (Greens/EFA), Burkhard Balz (EPP), Leonardo Dominici (S&D), Wolf Klinz (ALDE) and Pascal Canfin (Greens/EFA).

are no friends to this country.[/QUOTE]


If you actually read my original post you would have seen that I said that I was only talking in respect of corporation tax and I actually mentioned that I was not taking into account loss of income tax etc... Your suggestion of a 50% unemployment rate is absolutely ludicrous however, we're probably looking at something in the region of 10% in the long term. We are not Zimbabwe. Stop being sensationalist.

An increase in corporation tax would not mean every foreign company in the country would up and leave so the figure of 400,000 that you mention is never going to happen.

The people you mention may not be friends of Ireland as you say but that's not to say that there is no merit in Ireland as a country actually examining the possibility of a change to our corporate tax rate. I fail to see where this blind faith in one aspect of our taxation policy (i.e. 12.5%) seems to have become the general consensus among the population.

There is absolutely no reason why we couldn't have a higher corporate tax rate and at the same time provide a better place for international companies to do business by spending the extra taxation on infrastructure and education which as I stated before would benefit ordinary taxpayers also.

Pherekydes

Amhran Nua wrote: »

Did Bloomberg also report that Google employs almost two thousand people in Ireland in well-paying jobs, bringing total annual revenue easily to over fifty million euros?

And I wonder how much they save in tax? Might it exceed €50m?

Corporations doing business here should benefit the people here, not the people somewhere else. They should be paying a fair rate of Corporate tax. 12.5% is not a fair rate.

K-9

Amhran Nua wrote: »

Did Bloomberg also report that Google employs almost two thousand people in Ireland in well-paying jobs, bringing total annual revenue easily to over fifty million euros?

50 Million Euro?

I assume the blended rate of 3.4% was made up of 12.5% here, whatever the rate is in the Netherlands and 0% in the Caymans etc.

Amhran Nua

mconigol wrote: »

If you actually read my original post you would have seen that I said that I was only talking in respect of corporation tax and I actually mentioned that I was not taking into account loss of income tax etc... Your suggestion of a 50% unemployment rate is absolutely ludicrous however

So you've no clue how many people are actually employed by FDI here, the history of our corporate tax rate, or recent statements by US businesses in Ireland on the matter, and yet you feel capable of saying that a 50% unemployment rate is ludicrous. Great.

mconigol wrote: »

An increase in corporation tax would not mean every foreign company in the country would up and leave so the figure of 400,000 that you mention is never going to happen.

Okay, could you take a moment and list all of the competitive advantages Ireland has over say the UK, or Eastern Europe which is suddenly awash with fluent English speakers for some reason. Low labour costs, electricity costs, perhaps internet connectivity, anything really.

Pherekydes wrote: »

And I wonder how much they save in tax? Might it exceed €50m?

Who cares? Its better than the zero point zero we would be getting if they located elsewhere.

Pherekydes wrote: »

Corporations doing business here should benefit the people here, not the people somewhere else. They should be paying a fair rate of Corporate tax. 12.5% is not a fair rate.

Once again, I think the 400,000 odd Irish people employed via FDI in this country might vigorously disagree with your theory about people here not benefiting.

K-9 wrote: »

50 Million Euro?

I assume the blended rate of 3.4% was made up of 12.5% here, whatever the rate is in the Netherlands and 0% in the Caymans etc.

Income taxes, employers PRSI contribution, VAT paid by employees, the multiplier effect, and on and on and on...

K-9

Amhran Nua wrote: »

Income taxes, employers PRSI contribution, VAT paid by employees, the multiplier effect, and on and on and on...

Well, that would be rather obvious wouldn't it?

Employees get paid, thus paying PAYE/PRSI, spending money, hence VAT and the multiplier effect.

Does this really have to be pointed out? Seems a pointless exercise to me.

Employees in paying taxes shocker!

StupidLikeAFox

Run_to_da_hills wrote: »

Its too easy to get an infection in Politics.

You should wear a condom in future

Dionysus

th3 s1aught3r wrote: »

Seriously though. I guess from a German perspective they are bailing us out and why should we be allowed an unfair advantage on them ?

This. Although I wonder who's bailing out whom now. But the general idea of Ireland receiving EU subsidies funded by France, Germany etc while sitting on the luxury of a 12.5% corporation tax rate which in effect robs jobs from the same countries is surely unsustainable, as unpopular as it is to say.

Moreover, I'd rather our state did not lower the standards in Europe - those higher tax rates, remember, are funding better social services in those countries. Our low rate is an attempt to undermine the higher rates elsewhere, and thus the superior social services.

This 12.5% rate is not exactly Ireland's finest contribution to social justice in the European Union.

arid

This "tax haven" bull**** annoys me. If we're such a tax haven why the **** do Bono and the boys live in Holland?

Apparently anyway Ireland takes in a higher overall percentage of tax from companies than in Germany. So there. (poxy indirect taxes maybe but there you are)

Europe (or rather France and Germany) would do well to realise much of this economic crisis comes from treating the whole of the continent as if it was the same. It's not. Common tax is retarded.

The euro might be a good idea but we've kind of put the cart before the horse. The US works as a currency union because of balance transfers from richer/better-performing states to weaker ones. And they have tax setting and competition between states.

The Baltic states had 0% corporation tax and not a murmur was heard about it. Apparently it's ok to stimulate your economy so long as god forbid you don't catch up to Germany and France. :rolleyes:

They can hardly be sanctimonious about it when their so-called bailout is set to cripple us for decades. Really showing solidarity there.

It's all well and good for Germany. They are at the physical centre of Europe. The opportunity for industry is enormous. One which to be fair they've taken. But it's no coincidence the economies in trouble are the ones on the literal geographical edge of Europe. Much harder to build up an industrial base. Give us a break FFS.

Amhran Nua

K-9 wrote: »

Well, that would be rather obvious wouldn't it?

You would think so, alright.

Dionysus wrote: »

But the general idea of Ireland receiving EU subsidies funded by France, Germany etc while sitting on the luxury of a 12.5% corporation tax rate which in effect robs jobs from the same countries is surely unsustainable, as unpopular as it is to say.

Its not just unpopular, its flat out wrong.

Point the first, it's largely German and UK banks who foolishly loaned to Irish banks, so this "bailout" is us being charged 4% over the odds to bail them out, along with some sort of mantra of European solidarity to help Portugal and Spain. Shabby, very shabby. Point the second, there's nothing to stop these other countries dropping their CT - it's plain old fashioned competition.

Son Of A Vidic

This is what happens when a path of excessive integration/assimilation is followed. What happen to the old 'common market' - super-state fantasies I suppose. Time to GTFO!

evercloserunion

Four pages on, the fact that the commission has said that it cannot and would not introduce such a measure has not affected the overall levels of outrage and indignation at the fact that EU WILL MAKE US HAV 100000% TAXZ OH NOES!!!1!1

marco_polo

Surprised Joe Higgins wasn't involved.

getz

Amhran Nua wrote: »

You would think so, alright.


Its not just unpopular, its flat out wrong.

Point the first, it's largely German and UK banks who foolishly loaned to Irish banks, so this "bailout" is us being charged 4% over the odds to bail them out, along with some sort of mantra of European solidarity to help Portugal and Spain. Shabby, very shabby. Point the second, there's nothing to stop these other countries dropping their CT - it's plain old fashioned competition.

name going around the EU at this moment is PIGS,Portugal,Ireland,Greece,Spain,

FreudianSlippers

Portugal is probably worse than we were/are. Italy is up there too.