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Corporation Tax for Lower Interest Rates: Merkel

  • 10-03-2011 6:54pm
    #1
    Registered Users, Registered Users 2 Posts: 1,053 ✭✭✭


    Didn't see this posted anywhere else.
    Bloomberg wrote:
    German Chancellor Angela Merkel told lawmakers she would back lower interest rates for emergency loans if Greece agrees to sell state assets and Ireland backs a common corporate tax base in the euro region.

    Link

    Rumoured to be what she said. Pre-conference games? Or likely demand? And if so, will the new government give in?

    I'd be surprised if the government did. It has become such a big issue, symbolically at least, that lowering corporation tax at the behest of the Germans/French wouldn't go down very well.

    Then again maybe because it's a new government, now is the right time to do it. There'd be fall out, but it's far enough (presumably) from the next election not to be a major issue (depending on the fallout).

    I also don't quite understand why it is such a big issue. France has a lower rate and the English have pushed through legislation to give the City lower rates, and surely it benefits the EU to have multinationals operating here (as opposed to outside the EU).


Comments

  • Registered Users, Registered Users 2 Posts: 1,206 ✭✭✭zig


    Im honestly starting to believe that they purposely set the interest rate at a high level with a view to using it as barter in the long run for us to drop our CT. Bit conspiracy theorish but its fairly plain to see.

    Personally I believe we need to enter into a longterm project of reducing our dependence on foreign investment by concentrating on investing in local export enterprises first. This would give us more room to raise our CT. But that said, you have to call a spade a spade, we are right now very heavily reliant on foreign investment, it is the only thing keeping us remotely afloat and they are trying to kill that off.
    I know this sounds little bitter and resentful , but for me its a case of, Yes we want to change our CT as well, but we just don't want you telling us to.

    I wouldnt mind but if we scare off MNCs now that will have an affect on the rest of the European economy so Im not sure why they are so adamant on it.
    Anyway I await Scofflaws response... :)


  • Registered Users, Registered Users 2 Posts: 12,996 ✭✭✭✭Sand


    That would be a ridiculous trade for Ireland. The low corporate tax rate is a key component of our industrial policy. Any conceivable adjustment on the ECB/IMF bailout is basically irrelevant in the scheme of things. We would be giving something for nothing.

    Hopefully, Kenny and Co wont be bullied into this. However, given the DoF are still involved with their track record of failure it is a concern that they might consider this to be the basis of a deal.


  • Registered Users, Registered Users 2 Posts: 1,213 ✭✭✭ixtlan


    Sand wrote: »
    That would be a ridiculous trade for Ireland. The low corporate tax rate is a key component of our industrial policy.

    Merkel is not talking about a common corporate tax rate, but about the CCTB, common consolidated tax base. This is the means of calculating the relevant tax.

    France has a higher nominal rate, but different allowances and exemptions reduce the effective rate (though I doubt the average effective rate is as low as here). A common tax base would level the playing field so that you knew how much tax companies were paying.

    Now, there are issues with a CCTB also, which could negatively affect Irish competitiveness, but this is not as big a step as a common rate, which is something that there would never be EU agreement on anyhow.

    Ix.


  • Closed Accounts Posts: 4,784 ✭✭✭Dirk Gently


    correct response to that would be a lowering of the corpo tax % for every percentage point above 3% charged on the interest.


  • Registered Users, Registered Users 2 Posts: 12,996 ✭✭✭✭Sand


    I understand the difference, the aim is the same and Irish approval is required either way so agreement would be equally foolish. The Irish can and ought to veto it. Our corporate tax rate is critical, the rate of interest on a bailout we cant afford to repay regardless is not.


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  • Closed Accounts Posts: 837 ✭✭✭whiteonion


    What's up with the obsession with a low corporate tax? It's no a sacred cow. The way I see it is that if I have to pay more taxes the rich corporate types should also have to pay more taxes.

    Well I forgot in Ireland taxes is just for us "peasants" who can't afford accountants and lawyers.


  • Registered Users, Registered Users 2 Posts: 4,090 ✭✭✭RichardAnd


    whiteonion wrote: »
    What's up with the obsession with a low corporate tax? It's no a sacred cow. The way I see it is that if I have to pay more taxes the rich corporate types should also have to pay more taxes.

    Well I forgot in Ireland taxes is just for us "peasants" who can't afford accountants and lawyers.


    I think there's an element of German and French populism at work in all of this. The people of the fiscally responsible European countries are not happy paying taxes to bail us out and thus, making the smart arse paddies pay dearly will win votes for mrs Merkel and short-arse in France.


  • Registered Users, Registered Users 2 Posts: 24,560 ✭✭✭✭Cookie_Monster


    Tell Merkel we'll increase corp tax 1% for every 1% reduction in interest rate.

    Take it or leave it.


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    What is it with people and the difference between tax base and tax rate? How in the name of all that's holy can you have a thread where most people are discussing something that isn't happening?

    What's on the table is Ireland dropping its opposition to CCCTB, not raising its CT rate. Can we for the love of God please at least start from there?

    If anyone doesn't understand the difference, FFS ask. Otherwise the discussion is completely pointless - we might as well discuss the Ghanaian wombat crisis.

    exasperated,
    Scofflaw


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    Also - stupid posts that consist of anonymous keyboard defiance of Merkel and Sarkozy will be deleted. If you can't think of anything to say bar "tell Merkel to **** off", don't post, you're not adding anything. Go shake your fist in the mirror or something.

    moderately,
    Scofflaw


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  • Registered Users, Registered Users 2 Posts: 3,872 ✭✭✭View


    Scofflaw wrote: »
    What's on the table is Ireland dropping its opposition to CCCTB

    I am not sure we are actually opposed in practice to CCCTB. Yes the politicians have shot their mouths off about it, but the civil servants still participated at the meetings about it in the past.

    I'd imagine that getting the companies here to pay CT at the actual CT rate here rather than at a fraction of it like some of them do (e.g. Google) wouldn't upset the general public that much - particularly if the alternative was the closure of their local hospital for instance.


  • Registered Users, Registered Users 2 Posts: 3,872 ✭✭✭View


    Tell Merkel we'll increase corp tax 1% for every 1% reduction in interest rate.

    Take it or leave it.

    Take it or leave it won't work with Merkel.


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    View wrote: »
    I'd imagine that getting the companies here to pay CT at the actual CT rate here rather than at a fraction of it like some of them do (e.g. Google) wouldn't upset the general public that much - particularly if the alternative was the closure of their local hospital for instance.

    In that case people may find this interesting: http://www.ssisi.ie/US_Companies.pdf

    Gives a good idea of the tax contribution by US MNCs in Ireland. The author's view is that while the perception is that US companies pay lower than the effective rate:
    There has been increased comment recently on the perception that multinational companies from the US (and other countries) are abusing transfer pricing rules to shift excessive profits into their Irish affiliates to take advantage of Ireland’s low corporation tax rate. Some commentators have been influenced by the use of BEA data to calculate effective tax rates (ETR) for US companies located in Ireland. The results appear to show low ETR, well below the 12.5 per cent rate. For example, the BEA data indicate US companies in Ireland paid CT revenue of €2.3bn in 2007 and reported combined profits of €33.3bn. This implies an aggregate ETR of 7.7 per cent for 2007.

    this isn't actually accurate:
    Using the LCD list of US companies, it is possible to match their CT payments to the CT1 return and compare the profits earned to the tax paid and calculate a rough ETR.

    The ETR is estimated at the level of the individual companies, unlike the estimates based on aggregate BEA data. The average (median) ETR for US companies for 2008 was 11.2 per cent. In 2007 the median ETR was 11.1 per cent. The median ETR in 2009 was 9.5 per cent but this figure is preliminary pending the full set of tax return data for 2009.

    The ETR would not be expected to match the standard 12.5 per cent rate exactly due to variations in the taxable base and, in particular, some manufacturing profits are taxable at 10 per cent in Ireland (this rate is important for many US companies).19 But it is striking that the average for US companies is very close to the standard rate and well above estimates produced with aggregated BEA data.

    However, I can't help but note that what the author is actually comparing there is their declared taxable profits to tax paid - a figure that is indeed going to give you something "strikingly close" to the statutory rate, and slightly below it due to capital allowances and other reliefs - but a figure that would not capture Google's use of the 'Double Irish' precisely because that tax mechanism means the money siphoned off to Bermuda isn't declared as profits in Ireland.
    View wrote: »
    I am not sure we are actually opposed in practice to CCCTB. Yes the politicians have shot their mouths off about it, but the civil servants still participated at the meetings about it in the past.

    As far as I'm aware, the DoF remains opposed, despite their participation, as do bodies like IBEC. I'm still not exactly certain why, though. Even in Ireland, support for CCCTB in the business community is 50%, and everywhere else in Europe it's higher - usually a good deal higher - for an optional CCCTB. There's no EU-level plan to introduce a mandatory CCCTB - it would have no business support.

    What Merkel is looking for here is for Ireland to drop its opposition to CCCTB, not to allow a mandatory CCCTB. An optional CCCTB seems a somewhat weird thing to object to, on the face of it. I can understand the argument that once we've agreed to an optional CCCTB, a mandatory CCCTB might be proposed - but there are very few supporters for such a proposal, because there are very few winners under a mandatory CCCTB.

    What is the objection, exactly? I keep asking, and most of what I get back is essentially "give them an inch and they'll take a metre" rhetoric. How would CCCTB impact companies based here, when opting for CCCTB treatment would result in their profits being taxed in higher-tax jurisdictions?

    still slightly perplexed,
    Scofflaw


  • Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭hinault


    Here's our country's official position as regards CCTB and the reasons for that position.



    Ireland supports the Commissions efforts in transforming the European Union into the most competitive economic zone in the world but we do not believe that the introduction of a Common Consolidated Corporate Tax Base could advance the Lisbon Agenda nor that it could improve the competitiveness of the European Union.

    Our position on the CCCTB is well known. We do not favour it for reasons of principle and practicality. The proposal cuts across national sovereignty and subsidiarity. We believe that choices on taxation and expenditure are matters for each Member State. It is for each Member State to decide on the structure of its own tax system reflecting its historical traditions and social and economic priorities.

    As a practical measure, we do not believe that the proposal would render company taxation less complex or reduce business costs. Furthermore a CCCTB risks being inflexible in that all MS would have to agree to any change in corporate tax rules. The experience in the VAT code is especially relevant here. Despite a harmonised system since 1976, there are continual cases arising at the ECJ seeking to clarify the VAT rules and base. We do not believe that the proposal would of itself reduce compliance costs for companies as the optional system proposed would add to the administrative burden. There is no evidence that it would address issues such as competitiveness for companies. It would create uncertainties for companies by abandoning the universally accepted separate entity approach and allocating profits across Member States by reference to an untried arbitrary formula. In overall terms, we believe that this project would not be supportive of European business.

    Ireland is engaged with the Commission and with other Member States in a technical examination of the project strictly on a without prejudice basis. The issue of a common corporate tax base will have to be decided on policy and political grounds and not on the basis of technical analysis only. In that regard it is important to remember that no political decisions have been taken to date on this issue. That said we believe that a significant number of Member States remain sceptical about the Commission’s plans.


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    hinault wrote: »
    Here's our country's official position as regards CCTB and the reasons for that position.

    Handy summary! My problem with it is that pretty much everyone else at this stage disagrees with the Irish position, and it's hard for me to regard the Irish government as a bastion of particular economic genius, what with one thing and another.
    hinault wrote: »
    Ireland supports the Commissions efforts in transforming the European Union into the most competitive economic zone in the world but we do not believe that the introduction of a Common Consolidated Corporate Tax Base could advance the Lisbon Agenda nor that it could improve the competitiveness of the European Union.

    Our position on the CCCTB is well known. We do not favour it for reasons of principle and practicality. The proposal cuts across national sovereignty and subsidiarity. We believe that choices on taxation and expenditure are matters for each Member State. It is for each Member State to decide on the structure of its own tax system reflecting its historical traditions and social and economic priorities.

    OK, that's the principle, which is comprehensible, and sounds fine - I certainly don't disagree - but which it's sort of hard to see the relevance of. If CCCTB is optional, what relevance does the principle here have exactly? Ireland would still be deciding "the structure of its own tax system reflecting its historical traditions and social and economic priorities" - it would just be offering in addition to its purely domestic structures the possibility for a company to opt for a pan-EU consolidated return. Or not, since last time I read the CCCTB proposals, it was also up to the country whether to offer CCCTB even as an option.

    I can see that allowing a company to opt for CCCTB moves some of the tax affairs of the company out of strictly Irish hands. But that's the case now too - companies engage in tax planning. Google doesn't have to book its advertising profits in Ireland - it could equally well book them in Germany if Germany offered a lower CT rate (and the other advantages Ireland has).

    Nor does Ireland have any objection to tax deals - indeed, Ireland has one of the world's most comprehensive systems of bilateral tax treaties. Each one of those is exactly as objectionable as CCCTB in the "mom and apple pie" principles of sovereignty cited here.
    hinault wrote: »
    As a practical measure, we do not believe that the proposal would render company taxation less complex or reduce business costs.

    Then companies won't opt for it, right? It will simply become a failed experiment - or else be altered by unanimous agreement until it does reduce business costs.

    If it doesn't work, it doesn't work - but why is that a basis for objecting to trying it? Why not say "sure, go ahead - and trade us these concessions", and laugh all the way to the bank.
    hinault wrote: »
    Furthermore a CCCTB risks being inflexible in that all MS would have to agree to any change in corporate tax rules.

    So any sort of change to CCCTB can be vetoed.
    hinault wrote: »
    The experience in the VAT code is especially relevant here. Despite a harmonised system since 1976, there are continual cases arising at the ECJ seeking to clarify the VAT rules and base. We do not believe that the proposal would of itself reduce compliance costs for companies as the optional system proposed would add to the administrative burden. There is no evidence that it would address issues such as competitiveness for companies. It would create uncertainties for companies by abandoning the universally accepted separate entity approach and allocating profits across Member States by reference to an untried arbitrary formula. In overall terms, we believe that this project would not be supportive of European business.

    Again, though - OK, so if it doesn't offer any advantages, business won't adopt it. The funny thing is, though, that many businesses disagree with the DoF and Irish government here.
    hinault wrote: »
    Ireland is engaged with the Commission and with other Member States in a technical examination of the project strictly on a without prejudice basis. The issue of a common corporate tax base will have to be decided on policy and political grounds and not on the basis of technical analysis only. In that regard it is important to remember that no political decisions have been taken to date on this issue. That said we believe that a significant number of Member States remain sceptical about the Commission’s plans.

    In other words, even if someone can show that the Irish government's technical objections are dubious - and reading the reports they've commissioned in support of their technical objections, I would definitely regard them as dubious (the Ernst & Young study, for example, compares well-developed and mandatory compliance routines in 5 companies with ad hoc voluntary attempts to simulate CCCTB compliance, and is claimed to be a reliable comparison) - the Irish government will go on objecting.

    The objections of principle, then, seem too much like an appeal to something no-one can disagree with but which is largely irrelevant, while the practical objections, if correct, mean that the project will simply be a dead letter, because companies will rapidly abandon it.

    The Irish government position seems internally contradictory - something which with respect to the Irish government usually indicates some sort of vested interest at work.

    Now, the American Chambers of Commerce in the EU aren't opposed to harmonising the base: http://ec.europa.eu/taxation_customs/resources/documents/taxation/company_tax/common_tax_base/amchamn_non_discrimination.pdf

    Although they're very clear about rates:
    Responding to reports that the issue of Ireland’s corporation tax rate will be discussed at tomorrow’s Heads of Government meetings, Joanne Richardson, Chief Executive of the American Chamber of Commerce in Ireland said;

    “The attempts of certain members of the European Union to force the Irish Government’s hand on our corporation tax rate must be strongly opposed. Ireland’s tax policy remains a sovereign issue and no doubt the Irish Government will remind our EU colleagues of this fact”.

    “The fiscal success of Ireland’s corporate tax policy is clear. It has attracted leading multinational companies to Ireland and in the process it has created hundreds of thousands of jobs that would otherwise have been lost not just to Ireland but to the EU as a whole.

    “An OECD multi-country study found a 1% increase in the corporate tax rate cuts inward investment by 3.7% on average. In other words, it would take only a 2.5% rise in the rate to cut Ireland’s inward investment by nearly 10%.

    “The EU wants and needs Ireland to be in the best possible position to repay funding on time and with relative ease. Maintaining the 12.5% regime puts Ireland in the best possible position to do that.

    “The focus on Ireland’s headline rate of corporation tax is misplaced. Many other countries within the European Union have very competitive corporate tax offerings and can offer investors effective rates lower than Ireland’s. Also the simple truth is that our corporation tax rate is not the most competitive in the world.

    “We are very concerned that the potentially negative implications for the wider European Union if Ireland was forced to increase its corporation tax rate are not fully appreciated. When we win jobs, the entire European Union benefits. When we lose investment, the investment is lost not just to Ireland but to the European Union. Any increase in corporation tax will have a damaging impact on our ability to win and retain investment for Ireland and the European Union.

    “Ireland has one of the world’s most transparent taxation regimes and has concluded comprehensive tax treaties with 62 other countries across the globe. This regime has been approved by the EU and the OECD. Indeed, the OECD has in relation to the standards of openness, compliance, and accountability of the taxation regime consistently rated Ireland in its highest tier of conformance possible. The focus of other EU member states should be on their own corporation tax regimes and how they can become more competitive”.

    IBEC, on the other hand, is most certainly opposed to harmonising the base:
    IBEC warns against any EU tax harmonisation move

    The Irish Business and Employers Confederation (IBEC), the group that represents Irish business, today warned against the inclusion of tax harmonisation measures in the economic reform package being discussed at the EU summit. The group said such a move was at odds with the economic needs of Ireland and Europe.

    Commenting on the emerging proposals, IBEC Director General Danny McCoy said: "We all accept the need for economic governance reform in the Eurozone, but this debate should be separate from any discussions on the merits of tax harmonisation. Irish and European businesses are concerned that a Common Consolidated Corporate Tax Base (CCCTB) in Europe would result in higher compliance costs for business and would also lead to more penal corporate tax bills, as a greater share of profits would be subject to the higher corporation tax rates in the large consuming countries, such as Germany and France.

    "The proposals for tax base harmonisation would make Europe less attractive for foreign investment. Countries such as Ireland and the Netherlands would lose out on investment and this mobile activity would move outside the EU to locations such as Singapore, rather than to high cost and high tax economies such as France.

    "A harmonised corporate tax model would create uncertainty for Exchequer taxes and businesses across Europe and would be very damaging in the current economic climate. The focus of the summit should be on how to make Europe more competitive in a global context, rather than on forcing common approaches on issues such as business taxes, which would be inappropriate and counterproductive to economic recovery at a national level."

    Now that really is a pile of steamingly ripe bull, because they're conflating rate and base there, and pretending that CCCTB would be mandatory - the negative effects they claim are for raising the rate, and the "penal corporate tax bills" can only exist if companies who would rather not do so are forced to use CCCTB, which nobody is proposing. I'm pretty certain IBEC understand the difference, so those therefore aren't the real objections - they're "terrorists will eat your children" scare tactics.

    It continues to puzzle me, because a lot of what is being said is irrelevant or contradictory, and Irish opponents of tax base harmonisation invariably end up pretending it's about the rate - which suggests that the objections to the base aren't really solid. It's easy to get people whipped up about the rate - one can see from this thread that people are easily confused between the two - but, in the grand tradition of Irish public debate, it means that the real issue isn't getting debated, and that somebody somewhere in the Irish establishment is engaged in pulling the wool over the public's eyes.

    cordially,
    Scofflaw


  • Registered Users, Registered Users 2 Posts: 4,236 ✭✭✭Dannyboy83


    whiteonion wrote: »
    What's up with the obsession with a low corporate tax? It's no a sacred cow. The way I see it is that if I have to pay more taxes the rich corporate types should also have to pay more taxes.

    Well I forgot in Ireland taxes is just for us "peasants" who can't afford accountants and lawyers.

    The obsession with corporate tax is as follows:

    Company A operated in a ridiculous way and borrowed a huge amount of money, X, from well run companies to run their own pathetic company.
    You own Company B, which bought Company A (who lied about their accounts at the time of sale).
    Company B is now liable for this debt, X.

    Company A turned out to be completely broken and doesn't make any profit, in fact it's making more and more losses, all of which Company B is now responsible for.
    Company B had it's own debt to pay, which was probably manageable only for W, but with the combined debt from A+B, all rolled into X, the debt is unmanageable.

    The amount of money that Company B earns, Z, is collapsing anyway, since you are running your company in a really sh1t manner, overcharging customers and giving shoddy service compared to rival companies.

    Then there is W;
    You pay your permanent employees unusually large amounts of money, which you don't have the appetite to change, because they will strike, leaving your company broken.
    You also agreed to pay unusually large pensions when times were good, again you are unable to renege on this, for similar reasons.
    And to make matters even worse again, when times were good, you got drunk on Corporate Social Responsibility and started paying unusually large amounts of money to people who couldn't secure employment with you, which wasn't a problem when your company was booming. Now hundreds of thousands of people can't secure employment with you, so you are liable for all of them.
    So roll all of these atrocious management decisions into 1 almighty sh1theap called, W.

    So now, Z < W.
    And Z < B.
    Ergo, B+W forces Z to gargle diarrhea and expect Z to enjoy it.

    All of this is your own fault, not mine, and it's your own fault that you agreed to be liable for X, when you legally could have cut this liability off, due to Company A lying about their accounts.
    And it's your own fault that you don't have the appetite to fix W, which is killing your company before X was ever even considered.

    You are badly in need of funds to keep your company ticking over.
    Normally, you could go to special markets and try to borrow money.
    Problem is, everyone knows your company is a total mess.
    Nobody wants to risk lending you money if you can't even repay the money you're already liable for!

    I, Dr.Euro, do realise however, that if you go bankrupt, the companies who lent X will never ever get X back.
    Since you're not the only company that has run a cowboy outfit, if the other cowboy companies see you roll over, they may do the same.
    And I don't want you to fail anyway, since that leaves all the people in your company, (and your care, through W), up sh1t creek - which I probably rescued you from years ago anyway!

    This also has the ability to put me out of practice permanently, as recently happened my neighbour, Dr.CCCP.
    And destroy many of the companies who did all the lending.
    It's an epic disease, and you are one of the infected, it has to be contained, to prevent it spreading.

    So I don't have a cure, but I come up with a plan;
    With an injection of funds from me, bailout money, you could keep Company B ticking over, potentially grow Z, and eventually pay off X. Disaster averted.

    Everybody wins, to differing degrees, but everybody wins nonetheless, compared to the alternative.
    If I don't step in with bailout money, then everybody could lose very badly, just as Dr.CCCP did.
    (Bear in mind, you still have to fix W regardless!)

    I am the hero coming to your rescue.
    For some reason, many in your company say that I am the bad guy, and that I and the other companies should pay for all your screw ups, including those who you are capable of fixing, but obstinately refuse to, i.e. W! Your people attack me while refusing to help themselves!
    I am trying to administer a cure, yet you are claiming I'm trying to poison you!

    But anyway, I've no choice but to try contain the disease, so I agree to lend you bailout money at interest rate Y, which I gather up from the well run companies (better run than yours at least) and loan to you.
    I cannot be seen to give you the money for free, or it leads us back to the contagion problem.
    There is a problem with Interest rate Y tho.

    Inflation is low, which means your debt burden doesn't ease very much over time. And the rate at which Z is growing is far too slow. In fact, Z may still be collapsing. And you still refuse to help yourself by fixing W!

    Therefore the interest rate Y is too high; your overall debt is actually increasing over time, not decreasing. It's not a frying pan to the fire scenario, because your company is enabled to trudge along in the hope that things will eventually improve. (Frying pan to the fire would have been no bailout money, meaning totally collapse of your company. No need to Thank me.)

    So you report back to me that interest rate Y is not going to work.
    It needs to be renegotiated.

    I go back to the other companies and tell them this.
    They say we can do a deal.

    Here is where corporate tax rate comes into it.
    Your company, Company B, offers an unusually low CTR which means that, despite your shoddy services, you get lots of business from hotshot foreign companies.
    This works to your advantage, not only through considerably improving Z, but also through heavily alleviating the burden of W.

    If you attempt to increase the CTR, those hotshot foreign companies will simply give their business to the other companies in Europe (who are bailing you out), since they offer far better services and are generally far more attractive.
    This works against you twofold, by considerably reducing Z and substantially increasing the burden of W.

    The other companies who are lending you bailout money, see this as unfair that you are using what they consider to be a ruthless tactic to dominate this niche market. They are unable to compete with you.
    So they think a fair exchange would be to renegotiate Y, in return for renegotiating your CTR rate.

    This amounts to an infinite sh1t sandwich which you must consume;
    if you give up your CTR; you have just lost your most profitable market.
    And despite renegotiating Y, it doesn't change very much, since Z is still way too small. If anything, it just makes the problem even worse!

    So what's the solution?
    Simple actually.
    Fix W!

    (Edit: Or alternatively, we give up our CTR, and they agree to write off massive amounts of our debt. Still have to fix W tho!)


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    Dannyboy83 wrote: »
    The obsession with corporate tax is as follows:

    ...

    Um, no, because that's rate. Again.

    Merkel is talking about the base, not the rate. You are talking about the rate.

    cordially,
    Scofflaw


  • Registered Users, Registered Users 2 Posts: 4,236 ✭✭✭Dannyboy83


    Scofflaw wrote: »
    Um, no, because that's rate. Again.

    Merkel is talking about the base, not the rate. You are talking about the rate.

    cordially,
    Scofflaw

    I know, I was replying to WhiteOnion.

    From my (admittedly very limited) understanding of the CCTB, the outcome is much the same, simply not as dramatic.

    (Edit: And now on rereading WO's question, I see he didn't specifically ask about the rate.
    Note to self: Read questions more carefully before wasting an hour writing a reply.
    SmallThumbnail.jpg


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    Dannyboy83 wrote: »
    I know, I was replying to WhiteOnion.

    From my (admittedly very limited) understanding of the CCTB, the outcome is much the same, simply not as dramatic.

    (Edit: And now on rereading WO's question, I see he didn't specifically ask about the rate.
    Note to self: Read questions more carefully before wasting an hour writing a reply.

    It saves on memes...

    People (or at least IBEC) do claim exactly the same effects for CCCTB as for a CT rate rise, that's true - but they don't actually support the claim, and it's not very logically connected.

    An optional CCCTB, which is what's being proposed, would allow Irish-based multinationals to choose to have more of their profits taxed in high-tax countries by opting for CCCTB, thereby paying a lot more tax. On the other hand, they could choose not to opt for CCCTB, and keep declaring their profits in Ireland under Ireland's low CT rate.

    Since the first option makes absolutely no sense for any multinational that chose Ireland to avail of the low CT rate, it's kind of hard to see why CCCTB would be a problem. Companies wouldn't opt for it unless it saved them money.

    A mandatory CCCTB would have bad effects, since it would result in the redistribution of corporate profits from Ireland to Germany et al, as well as costing the affected companies more money in tax. But nobody is proposing a mandatory CCCTB, because nobody really wants it - whereas businesses across Europe do want an optional CCCTB, because they believe it would simplify their tax accounting.

    cordially,
    Scofflaw


  • Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭hinault


    Dannyboy83 wrote: »
    I know, I was replying to WhiteOnion.

    From my (admittedly very limited) understanding of the CCTB, the outcome is much the same, simply not as dramatic.

    (Edit: And now on rereading WO's question, I see he didn't specifically ask about the rate.
    Note to self: Read questions more carefully before wasting an hour writing a reply.
    SmallThumbnail.jpg

    That was a considerable earlier effort!


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  • Registered Users, Registered Users 2 Posts: 5,932 ✭✭✭hinault


    Great post Scofflaw regarding the American Chamber of Commerce.

    The Yanks make the case for the preservation of the current CT rates but they also highlight the bilateral tax agreements that are in place.

    I can't see how CCBT can be implemented given the apparent economic/industrial imbalances that the Euro crises have brought in to sharp focus.

    If Merkels comments have been reported correctly and she's looking for an Irish endorsement of CCBT in exchange for wriggle room on the EU/IMF loan interest rate, we could take the risk of committing to support the CCBT concept on the basis that some other nation will veto the concept later:D


  • Closed Accounts Posts: 2,288 ✭✭✭TheUsual


    Here's two questions for you.

    If Enda Kenny just decided to get rid of of our corporation tax because he was bullied by the EU, would we Irish people get a vote on it ?

    And if not, would we have to wait 4 years to change Government again so we can re-instate our original corporation tax ?


  • Registered Users, Registered Users 2 Posts: 4,090 ✭✭✭RichardAnd


    TheUsual wrote: »
    Here's two questions for you.

    If Enda Kenny just decided to get rid of of our corporation tax because he was bullied by the EU, would we Irish people get a vote on it ?

    And if not, would we have to wait 4 years to change Government again so we can re-instate our original corporation tax ?


    to the first question, no there would not have to be any vote on such an issue. It's not in our constitution thus, it is one of those things that we elect a government to look after on our behaf.

    to the second question, there is no real answer. The new government could fall apart because of such a decision and even if it did, there's no promise that any new government will return our corporation tax to it's current level.


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    hinault wrote: »
    Great post Scofflaw regarding the American Chamber of Commerce.

    The Yanks make the case for the preservation of the current CT rates but they also highlight the bilateral tax agreements that are in place.

    I can't see how CCBT can be implemented given the apparent economic/industrial imbalances that the Euro crises have brought in to sharp focus.

    If Merkels comments have been reported correctly and she's looking for an Irish endorsement of CCBT in exchange for wriggle room on the EU/IMF loan interest rate, we could take the risk of committing to support the CCBT concept on the basis that some other nation will veto the concept later:D

    Indeed, according to our own national position on CCCTB, we can take the risk in the sure knowledge that it will simply collapse because it's such an awful idea.

    Nothing to worry about at all, surely...

    cordially,
    Scofflaw


  • Closed Accounts Posts: 4,025 ✭✭✭Tipp Man


    Scofflaw wrote: »
    It saves on memes...

    People (or at least IBEC) do claim exactly the same effects for CCCTB as for a CT rate rise, that's true - but they don't actually support the claim, and it's not very logically connected.

    An optional CCCTB, which is what's being proposed, would allow Irish-based multinationals to choose to have more of their profits taxed in high-tax countries by opting for CCCTB, thereby paying a lot more tax. On the other hand, they could choose not to opt for CCCTB, and keep declaring their profits in Ireland under Ireland's low CT rate.

    Since the first option makes absolutely no sense for any multinational that chose Ireland to avail of the low CT rate, it's kind of hard to see why CCCTB would be a problem. Companies wouldn't opt for it unless it saved them money.

    A mandatory CCCTB would have bad effects, since it would result in the redistribution of corporate profits from Ireland to Germany et al, as well as costing the affected companies more money in tax. But nobody is proposing a mandatory CCCTB, because nobody really wants it - whereas businesses across Europe do want an optional CCCTB, because they believe it would simplify their tax accounting.

    cordially,
    Scofflaw


    Surely the fear of the Irish government/DOF is that the initial CCCTB would be optional but would become manadotory after a period of time? Once the framework is set up it would be very easy to make it mandatory and then we would be in trouble


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    Tipp Man wrote: »
    Surely the fear of the Irish government/DOF is that the initial CCCTB would be optional but would become manadotory after a period of time? Once the framework is set up it would be very easy to make it mandatory and then we would be in trouble

    As the Irish government points out themselves:
    Furthermore a CCCTB risks being inflexible in that all MS would have to agree to any change in corporate tax rules.

    Actually, they're over-egging the pudding there*, but any further change in CCCTB would need to be unanimous.

    Further, there just isn't any business support for a mandatory CCCTB (hardly surprising), whereas there's very wide support for the optional CCCTB that's being proposed.

    cordially,
    Scofflaw

    * because the unanimity would only apply to CCCTB, not to corporation tax in general, which is what they've made it sound like.


  • Registered Users, Registered Users 2 Posts: 1,213 ✭✭✭ixtlan


    Scofflaw wrote: »
    An optional CCCTB, which is what's being proposed, would allow Irish-based multinationals to choose to have more of their profits taxed in high-tax countries by opting for CCCTB, thereby paying a lot more tax. On the other hand, they could choose not to opt for CCCTB, and keep declaring their profits in Ireland under Ireland's low CT rate.

    Since the first option makes absolutely no sense for any multinational that chose Ireland to avail of the low CT rate, it's kind of hard to see why CCCTB would be a problem. Companies wouldn't opt for it unless it saved them money.

    Hmmm. I really am not an expert on this area. Let me suggest a scenario which may be off the wall or not.

    If I'm a major multinational laundering money through Ireland I would never opt for CCTB. However if I was a major multinational with main financial offices in Germany, and with a smaller office in Ireland, might I make a trade off and say that the minimal level of profits that were being declared in Ireland are better off using the CCTB just for the administrative convenience, which might be worth more than the tax saved.

    That assumes that the CCTB is available as an option to such a company operating in Ireland. If it was not available, I suppose it's possible that a multi might decide against Ireland for a small office/plant just because of the inconvenience of having to operate outside a CCTB area.

    The feeling I get on the CCTB is that we are not going to lose companies that set up or will set up here to avail of low tax specifically, but outside of low tax, from a financial/administrative viewpoint we might lose some investment (or more likely some tax), especially from EU based companies.

    So, maybe not a huge amount to lose, but perhaps nothing to gain, and we are trying to avoid that loss. Still, it may be a trade worth making for other concessions.

    Ix.


  • Closed Accounts Posts: 5,700 ✭✭✭irishh_bob


    zig wrote: »
    Im honestly starting to believe that they purposely set the interest rate at a high level with a view to using it as barter in the long run for us to drop our CT. Bit conspiracy theorish but its fairly plain to see.

    Personally I believe we need to enter into a longterm project of reducing our dependence on foreign investment by concentrating on investing in local export enterprises first. This would give us more room to raise our CT. But that said, you have to call a spade a spade, we are right now very heavily reliant on foreign investment, it is the only thing keeping us remotely afloat and they are trying to kill that off.
    I know this sounds little bitter and resentful , but for me its a case of, Yes we want to change our CT as well, but we just don't want you telling us to.

    I wouldnt mind but if we scare off MNCs now that will have an affect on the rest of the European economy so Im not sure why they are so adamant on it.
    Anyway I await Scofflaws response... :)


    we should consider raising corporation tax but only on condition that the interest rate on our bailout is reduced to 1 % , its still a pretty good deal for france and germany considering its irish tax payers who are bailing out french and german banks by proxy


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    ixtlan wrote: »
    Hmmm. I really am not an expert on this area. Let me suggest a scenario which may be off the wall or not.

    If I'm a major multinational laundering money through Ireland I would never opt for CCTB. However if I was a major multinational with main financial offices in Germany, and with a smaller office in Ireland, might I make a trade off and say that the minimal level of profits that were being declared in Ireland are better off using the CCTB just for the administrative convenience, which might be worth more than the tax saved.

    That assumes that the CCTB is available as an option to such a company operating in Ireland. If it was not available, I suppose it's possible that a multi might decide against Ireland for a small office/plant just because of the inconvenience of having to operate outside a CCTB area.

    The feeling I get on the CCTB is that we are not going to lose companies that set up or will set up here to avail of low tax specifically, but outside of low tax, from a financial/administrative viewpoint we might lose some investment (or more likely some tax), especially from EU based companies.

    So, maybe not a huge amount to lose, but perhaps nothing to gain, and we are trying to avoid that loss. Still, it may be a trade worth making for other concessions.

    Ix.

    That's an interesting one, and would seem like a feasible real issue! Yes, that's a situation in which it's both worth the company opting for CCCTB, and which would lose Ireland tax receipts, albeit small amounts.

    Here's a worked example of a German company with a serious French presence, and a small Irish presence.

    |Group|German Company|Proportion|French Company|Proportion|Irish Company|Proportion
    Sales (€m)|1000|580|0.58|335|0.34|85|0.09
    Payroll (€m)|350|233.33|0.67|110.83|0.32|5.83|0.02
    Employees|6000|4000|0.67|1900|0.32|100|0.02
    Assets (€m)|1000|700|0.7|290|0.29|10|0.01
    Non-payroll costs (€m)|550|320||160||70|
    Profits before transfers (€m)|100|26.67||64.17||9.17|
    Margin before transfers|10||||||
    Non-CCCTB|||||||
    Transfer charges (€m)|0|0||0||0|
    Profits after transfers (€m)|100|26.67||64.17||9.17|
    Corporate tax (€m)||5.33|20.00%|22.09|34.43%|1.15|12.50%
    CT payable (€m)|28.57|5.33||22.09||1.15|
    ETR|28.57||||||
    CCCTB|||||||
    Apportionment|1|0.65||0.31||0.04|
    Apportioned Profits (€m)|100|64.89||31.39||3.72|
    Apportioned tax (€m)|24.25|12.98||10.81||0.47|
    ETR|24.25||||||
    Change (€m)|-4.32|7.64||-11.29||-0.68|

    The figures in bold there represent Ireland's tax take from this company: €1.15m without CCCTB, €0.47m if the company opts for CCCTB. The company reduces its tax bill by €4.32m. We're not the big losers here - France loses €11.29m, Germany gains €7.64m - but we do lose a bit.

    To make it work, the operation in Ireland has to be extremely lightweight - very little in the way of assets or employees. Also, the company has to be engaged in no transfer pricing to move profits to Ireland, or very little at most.

    If you do the same example with a bit of transfer of profits to the Irish company thrown in as a tax-planning mechanism - say 4% of sales revenue transferred as royalty payments to Ireland - we lose some more:

    |Group|German Company|Proportion|French Company|Proportion|Irish Company|Proportion
    Sales|1000|580|0.58|335|0.34|85|0.09
    Payroll|350|233.33|0.67|110.83|0.32|5.83|0.02
    Employees|6000|4000|0.67|1900|0.32|100|0.02
    Assets|1000|700|0.7|290|0.29|10|0.01
    Non-payroll costs|550|320||160||70|
    Profits before transfers|100|26.67||64.17||9.17|
    Margin before transfers|10||||||
    Non-CCCTB|||||||
    Transfer charges|0.04|20.3||11.73||-32.03|
    Profits after transfers|100|6.37||52.44||41.19|
    Corporate tax||1.27|20.00%|18.06|34.43%|5.15|12.50%
    CT payable|24.48|1.27||18.06||5.15|
    ETR|24.48||||||
    CCCTB|||||||
    Apportionment|1|0.65||0.31||0.04|
    Apportioned Profits|100|64.89||31.39||3.72|
    Apportioned tax|24.25|12.98||10.81||0.47|
    ETR|24.25||||||
    Change|-0.23|11.7||-7.25||-4.68|

    Here, we've lost €4.68m in tax - but the company is only saving €0.23m by opting for CCCTB, plus whatever it saves in compliance costs (according to the Irish view, of course, it won't save anything).

    As a general issue, it should be the case that where a group would benefit sufficiently from the differential between, say French and German CT rates under CCCTB apportionment to wipe out any advantage accruing from Irish tax rates, it becomes viable for them to opt for CCCTB, and represents a potential loss to us. The less tax-efficient a company is currently, the more it potentially has to gain from CCCTB. Now we just need to know how much of a possible loss such situations could represent.

    On the other hand, it's hard to see how France benefits very much from this, because even when we get into the rather nuanced situations like this one, what drives the adoption of CCCTB is still the differential in statutory rates, because under a CCCTB, the statutory differential is the effective differential because differences in the base have been eliminated.

    cordially,
    Scofflaw


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  • Registered Users, Registered Users 2 Posts: 1,213 ✭✭✭ixtlan


    Scofflaw wrote: »

    As a general issue, it should be the case that where a group would benefit sufficiently from the differential between, say French and German CT rates under CCCTB apportionment to wipe out any advantage accruing from Irish tax rates, it becomes viable for them to opt for CCCTB, and represents a potential loss to us. The less tax-efficient a company is currently, the more it potentially has to gain from CCCTB. Now we just need to know how much of a possible loss such situations could represent.

    I'm still unclear on the possible set up of a CCTB. If it's available to a company in Ireland, then have we in effect signed up to it in total? Or can companies choose whether to comply or not? I think if it exists then we have have to sign up to it, because if say an enhanced co-operation group was set up, I believe that would be something of a barrier for small EU sourced investments in Ireland.

    Like all of politics I suspect this will be a compromise. It's something that will adversely affect us, but most likely it's tolerable in return for some concessions and goodwill.

    Ix.


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    ixtlan wrote: »
    I'm still unclear on the possible set up of a CCTB. If it's available to a company in Ireland, then have we in effect signed up to it in total? Or can companies choose whether to comply or not? I think if it exists then we have have to sign up to it, because if say an enhanced co-operation group was set up, I believe that would be something of a barrier for small EU sourced investments in Ireland.

    Like all of politics I suspect this will be a compromise. It's something that will adversely affect us, but most likely it's tolerable in return for some concessions and goodwill.

    Ix.

    As far as I know, the plan is as follows:

    1. a country can choose whether or not to offer CCCTB to companies headquartered in its jurisdiction.

    2. the companies can choose whether to opt for CCCTB treatment or not - for a 5-year period initially, then for 3-year periods afterwards.

    cordially,
    Scofflaw


  • Closed Accounts Posts: 3,461 ✭✭✭liammur


    I believe the Europeans are right on this issue.


  • Registered Users, Registered Users 2 Posts: 4,090 ✭✭✭RichardAnd


    I suppose this latest development shows us one very clear thing. Regardless of what anyone might think about our corporation tax, it is not an issue that is going to go away.


  • Banned (with Prison Access) Posts: 3,073 ✭✭✭mickoneill30


    Interesting piece in todays Telegraph.
    The interest rate has been renegotiated for Greece but not for Ireland.
    I naively assumed that countries would be treated equally.
    It doesn't say what Greece had to do to get the lower tax rate. Does anybody know?

    http://www.telegraph.co.uk/finance/financialcrisis/8377816/EU-leaders-reach-deal-on-debt-crisis.html

    "Ireland was asked to make a gesture, but we didn't get satisfaction. So the renegotiation of loans that Greece has was not done for Ireland," French President Nicolas Sarkozy told journalists. "It's difficult to ask others to help finance a plan but not concern themselves with the tax side," Mr Sarkozy said.

    As somebody who works in one multinational I know my company evaluated why to stay in Ireland last year (they do it every few years). The corporate tax rate is just about giving Ireland the edge. Without that the maths would have told them to move. It's only about 900 jobs but it's also only one company.


  • Registered Users, Registered Users 2 Posts: 23,283 ✭✭✭✭Scofflaw


    Interesting piece in todays Telegraph.
    The interest rate has been renegotiated for Greece but not for Ireland.
    I naively assumed that countries would be treated equally.
    It doesn't say what Greece had to do to get the lower tax rate. Does anybody know?

    http://www.telegraph.co.uk/finance/financialcrisis/8377816/EU-leaders-reach-deal-on-debt-crisis.html

    Seems to be sale of assets:
    In return for Greece's concessions, Athens has committed to a detailed fire-sale privatisation programme worth some €50 billion.

    The country had been pushing for a reduction of two percent on the interest it pays, but the request fell on deaf ears in Berlin, Paris, the Hague and Helsinki.

    A similar 100-basis-point reduction on the rates Ireland pays on its €85 billion loan was also dangled in front of Prime Minister Enda Kenny, but the quid pro quo demanded by core eurozone countries was that Dublin agree to a common tax base for the single-currency area, a move that the taoiseach has described as "tax harmonisation through the back door."

    Ireland refused the deal, but both Kenny and French President Nicolas Sarkozy said that discussions on the matter will continue.

    On 11 February, experts from the troika of the International Monetary Fund, the European Commission and the European Central Bank took the Athens leadership by surprise when they announced that Greece was to embark on an ambitious privatisation programme worth €50 billion by 2015.

    The announcement came as something of a shock because at the start of the bail-out programme, the troika had demanded state sell-offs amounting to €1 billion a year from 2011 to 2015, for a total of €5 billion. As recently as the first review of the Greek austerity programme by the troika, little more was demanded from the government.

    A second review, in December last year, announced that Greek authorities were preparing a "more ambitious three-year" privatisation strategy than originally agreed, amounting to at least €7 billion over the next three years, following a review of real estate holdings.

    The shock €50 billion announcement provoked outrage in Athens.

    Prime Minister George Papandreou called up IMF boss Dominique Strauss-Kahn and commission economy chief Olli Rehn to complain about what Greek government spokesman George Petalotis had called "unacceptable behaviour."

    "We did not ask anybody to meddle in the internal matters of the country," he said at the time.

    Athens appears to have eaten some very expensive humble pie however.

    Papandreou told reporters that he had made "no new commitments" in terms of privatisation plans and that the €50 billion schedule was already in play.

    According to an EU diplomat from another core eurozone state, Greece offered up a list of what is to be sold off "and it was satisfactory."

    The emphasis will be on selling off public real estate. According to the conclusions of the eurozone summit, Greece is to "fully and speedily complete the €50 privatisation and real estate development programme." IMF analysts note that the country has between €200 and €300 billion in land holdings.

    The leaders also backed a ‘euro pact' aimed at boosting the EU's competitiveness through wage restraint, cutting public spending, making it easier to fire employees and raising retirement ages, amongst other measures.
    "Ireland was asked to make a gesture, but we didn't get satisfaction. So the renegotiation of loans that Greece has was not done for Ireland," French President Nicolas Sarkozy told journalists. "It's difficult to ask others to help finance a plan but not concern themselves with the tax side," Mr Sarkozy said.

    As somebody who works in one multinational I know my company evaluated why to stay in Ireland last year (they do it every few years). The corporate tax rate is just about giving Ireland the edge. Without that the maths would have told them to move. It's only about 900 jobs but it's also only one company.

    It's kind of unclear what was asked - the Sarkozy thing about the CT rate appears not to be the official quid pro quo, which seems to be the dropping of Ireland's opposition to CCCTB:
    A similar 100-basis-point reduction on the rates Ireland pays on its €85 billion loan was also dangled in front of Prime Minister Enda Kenny, but the quid pro quo demanded by core eurozone countries was that Dublin agree to a common tax base for the single-currency area, a move that the taoiseach has described as "tax harmonisation through the back door."

    Ireland refused the deal, but both Kenny and French President Nicolas Sarkozy said that discussions on the matter will continue.

    If Kenny is defending both rate and base, it's kind of hard to see what exactly Ireland can offer.

    cordially,
    Scofflaw


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  • Registered Users, Registered Users 2 Posts: 18,524 ✭✭✭✭Idbatterim


    we have been over this though, the amounts we owe are so staggering that what does it matter if the interest rate is 4,5 or 6%! its like me telling you boardsies, you owe me €1,000,000 but you can have the loan interest free, to be paid back in 2 or 3 years!


  • Registered Users, Registered Users 2 Posts: 259 ✭✭timbel


    If we offer up our corporate tax rate, we should demand burden sharing of the entire debt (existing debt plus any further capital reqs for banks - see Indo article today) across the EU.

    http://www.independent.ie/national-news/banks-will-need-another-euro25bn-2577524.html

    I am sure EU would baulk at that, but it would be the only way increasing the corporate tax rate of any benefit to us.


  • Registered Users, Registered Users 2 Posts: 18,524 ✭✭✭✭Idbatterim


    I wonder what rate of CT Merkel and Sarkozy etc have in mind. The only way I could see it possibly being worthwhile, is if a large amount if not all of the banking debt was forgiven... then we could go back to bondmarket and probably borrow at a reasonable rate...


  • Registered Users, Registered Users 2 Posts: 12,996 ✭✭✭✭Sand


    Idbatterim wrote: »
    I wonder what rate of CT Merkel and Sarkozy etc have in mind. The only way I could see it possibly being worthwhile, is if a large amount if not all of the banking debt was forgiven... then we could go back to bondmarket and probably borrow at a reasonable rate...

    That is the only valid grounds I could see for Ireland looking to do a deal with the EU/ECB. If theyre that obsessed with our CT regime then let them offer something thats worth discussing. 1-2% off on money we cant pay back is a waste of our time and their time. We need something game changing.


  • Registered Users, Registered Users 2 Posts: 1,017 ✭✭✭The_Thing


    Sand wrote: »
    .....We need something game changing.

    A referendum.


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  • Registered Users, Registered Users 2 Posts: 12,996 ✭✭✭✭Sand


    A referendum wont be game changing. It isnt binding on the EU, ECB, IMF or European governments. It should be clear by now none of the above, with the possible exception of the IMF, care what Ireland thinks. Only what Ireland is willing to do.


  • Closed Accounts Posts: 10,272 ✭✭✭✭Max Power1


    The_Thing wrote: »
    A referendum.
    Thats not game changing

    At most it would be a convincing bargaining point for Inda but is meaningless in all reality to the EU/IMF overlords.


  • Registered Users, Registered Users 2 Posts: 11,205 ✭✭✭✭hmmm


    Max Power1 wrote: »
    At most it would be a convincing bargaining point for Inda but is meaningless in all reality to the EU/IMF overlords.
    It would be a complete waste of money, we've elected a government with an overwhelming majority who are negotiating on our behalf.


  • Registered Users, Registered Users 2 Posts: 1,017 ✭✭✭The_Thing


    Max Power1 wrote: »
    Thats not game changing

    If that's the case then Merkel and her toy-boy won't object to us having one. Whatever gives them grief is fine by me.


  • Registered Users, Registered Users 2 Posts: 3,420 ✭✭✭Dionysus


    Didn't see this posted anywhere else.



    Link

    Rumoured to be what she said. Pre-conference games? Or likely demand? And if so, will the new government give in?

    I'd be surprised if the government did. It has become such a big issue, symbolically at least, that lowering corporation tax at the behest of the Germans/French wouldn't go down very well.

    Then again maybe because it's a new government, now is the right time to do it. There'd be fall out, but it's far enough (presumably) from the next election not to be a major issue (depending on the fallout).

    I also don't quite understand why it is such a big issue. France has a lower rate and the English have pushed through legislation to give the City lower rates, and surely it benefits the EU to have multinationals operating here (as opposed to outside the EU).

    I have to question this notion that the corporation tax is as big a deal as it's made out to be. Listening to the head of IBM and Facebook in Ireland talking with George Lee last Saturday week, both of them said that, for them, it was a much bigger deal that they couldn't get workers with the requisite skills in Ireland.

    For primarily cultural reasons - e.g. environmental policies, progressive ideas and more openness to continental ways of running society efficiently and fairly - I'm strongly pro-EU. Leaving the EU and returning to the dark days of being in the suffocating shadow of Britain would be the death knell of Irish independence. I believe we shouldn't be in effect undermining the social services of the EU by our maverick low corporation tax, while then having the hypocrisy to expect billions in subsidies from the countries which have these higher taxes. As a political society, we are very, very immature. By reducing taxes, and thus social services, we are heading the race to the bottom and the descent into societal chaos. On this issue of low corporation tax, we are not a very classy people.


    In contrast, on the issue of bank debt I believe the Irish government should tell France, Germany and Britain to suck it up. That is a clear case of Ireland being bullied into paying for the risk taking of corporations from those countries.


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