Corporation Tax

rodento

The German ambassador has said his country disputes a study which found that the effective rate of corporation tax in France was higher than in Ireland.

http://www.irishtimes.com/newspaper/breaking/2012/0301/breaking52.html

It found that though the headline corporation tax rate for France was 32 per cent, the effective rate was 8.2 per cent while Ireland’s effective rate was 11 per cent though the headline rate was 12.5 per cent.

Interesting reading would love to know what Sarkozy makes of it:mad:

Scofflaw

rodento wrote: »

The German ambassador has said his country disputes a study which found that the effective rate of corporation tax in France was higher than in Ireland.

http://www.irishtimes.com/newspaper/breaking/2012/0301/breaking52.html

It found that though the headline corporation tax rate for France was 32 per cent, the effective rate was 8.2 per cent while Ireland’s effective rate was 11 per cent though the headline rate was 12.5 per cent.

Interesting reading would love to know what Sarkozy makes of it:mad:

The PWC study's "profit tax" isn't terrifically useful for the sort of use people want to make of it. France taxes companies far more heavily than Ireland does - corporate total tax rate as a % of pre-tax profits in France is 65.7% to Ireland's 26.3%, according to PWC - but less of it is explicitly a profit tax than in Ireland.

France's argument has always been that Ireland taxes companies too lightly compared to itself, something which is very much borne out by the study.

cordially,
Scofflaw

liammur

rodento wrote: »

The German ambassador has said his country disputes a study which found that the effective rate of corporation tax in France was higher than in Ireland.

http://www.irishtimes.com/newspaper/breaking/2012/0301/breaking52.html

It found that though the headline corporation tax rate for France was 32 per cent, the effective rate was 8.2 per cent while Ireland’s effective rate was 11 per cent though the headline rate was 12.5 per cent.

Interesting reading would love to know what Sarkozy makes of it:mad:

Corporation tax in Ireland is simply way too low. If corporations don't pay their share, tax payers will pick up the tab.

Degsy

liammur wrote: »

Corporation tax in Ireland is simply way too low. If corporations don't pay their share, tax payers will pick up the tab.

Agreed..the tax needs to be increased sharply to make these companies pay thier way.

Nijmegen

France has something going for it that we don't: It has companies in France to sell to France, companies founded in France that are international players and companies that come to France to sell to the French.

Just today a survey of foreign businesses say that over half of them find the size of the domestic market a disadvantage to setting up in Ireland - IE, if they set up in (lets say) France they could fly the French jersey and get more of the 65 million people who live there to buy their products.

Ireland is a small country of 4.5m with no major indigenous industry turning out products, be it software to drugs, that people the world over want to buy.

The reason you come to Ireland as a corporate is to get relatively easy access to EMEA markets at a low tax rate.

Raise the taxes, they leave.

Until Ireland knocks out a few Apple, Microsoft and PayPal's of its own I'm afraid we rely on these companies to come here.

46 per cent of the investors based here cited Ireland’s access to other EU markets as the most attractive reason to set up here, while 29 per cent said the corporate tax rate was their main motivator for sticking around – and 44 per cent said it was what brought them here in the first place.

16 per cent of people cited double taxation agreements as a key reason to stay in Ireland, while 40 per cent ranked Ireland’s tax credits system for research and development as more competitive than those of other areas.

Elsewhere, 28 per cent of respondents said Ireland’s skilled workforce offered a competitive advantage, remarking that the workforce was “reliable and able to handle complexity”.

In a hint that the Irish market itself is not a major concern for the firms, 51 per cent of respondents said the size of Ireland’s domestic market was a distinct disadvantage.

liammur

Nijmegen wrote: »

France has something going for it that we don't: It has companies in France to sell to France, companies founded in France that are international players and companies that come to France to sell to the French.

Just today a survey of foreign businesses say that over half of them find the size of the domestic market a disadvantage to setting up in Ireland - IE, if they set up in (lets say) France they could fly the French jersey and get more of the 65 million people who live there to buy their products.

Ireland is a small country of 4.5m with no major indigenous industry turning out products, be it software to drugs, that people the world over want to buy.

The reason you come to Ireland as a corporate is to get relatively easy access to EMEA markets at a low tax rate.

Raise the taxes, they leave.

Until Ireland knocks out a few Apple, Microsoft and PayPal's of its own I'm afraid we rely on these companies to come here.

These companies have been coming to Ireland long before our 12.5%. Now of course, they will say they wouldn't be happy if it were increased.

I would suspect they will be far more likely to leave when they become unprofitable, i.e. patents running out, labour costs too high for their model, etc.

Farmer Pudsey

rodento wrote: »

The German ambassador has said his country disputes a study which found that the effective rate of corporation tax in France was higher than in Ireland.

http://www.irishtimes.com/newspaper/breaking/2012/0301/breaking52.html

It found that though the headline corporation tax rate for France was 32 per cent, the effective rate was 8.2 per cent while Ireland’s effective rate was 11 per cent though the headline rate was 12.5 per cent.

Interesting reading would love to know what Sarkozy makes of it:mad:

I have heard of this before there are so many claw back's for french companies that there effective rate I had heard was only 6-7% but if the german said it was 8.2% I will not argue with him.

This is tongue-in-cheek by Sarkozy complaining about the Irish rate when his own is below ours. The reasin the first place we have such a low rate is that the French made us charge the same rate to all companies in the 90's we had a rate for exporting company's and one for non exporting companies banks building companie insurance etc

Nijmegen

liammur wrote: »

These companies have been coming to Ireland long before our 12.5%. Now of course, they will say they wouldn't be happy if it were increased.

I would suspect they will be far more likely to leave when they become unprofitable, i.e. patents running out, labour costs too high for their model, etc.

Remind me again how much FDI was contributing to our economy before EEC accession and the drop of manufacturing corporation tax to 10% (the precursor to the total drop to 12.5%)?

Or how many R&D labs were here prior to the R&D tax incentives?

Because I seem to recall Ireland being an agrarian economy with high unemployment and high emigration. Perhaps I just missed all these companies coming here for the weather.

Gurgle

liammur wrote: »

Corporation tax in Ireland is simply way too low. If corporations don't pay their share, tax payers will pick up the tab.

Corporation tax is a white elephant, the big multinationals can choose any country they have a PO box in to declare profits. They have office blocks full of people who's entire job is fecking around with internal sale prices for just this reason.
A 12.5% rate encourages them to run the numbers so the Irish division shows the profits, and 12.5% of something is a lot better than 25% of nothing.

They also pay our bizarre and counter-productive employment tax (aka Employer's PRSI), which doesn't depend on profits or turnover.

Those companies employ people.
Not only do the employees pay taxes, they spend their pay here too. Every cent lands in the Irish economy.

BOHtox

liammur wrote: »

Corporation tax in Ireland is simply way too low. If corporations don't pay their share, tax payers will pick up the tab.

What? We're in Ireland, MNCs come here purely for that tax. Well educated my hole! Every other country in western Europe is well educated. English speaking? Have you ever met someone from western Europe who hasn't had a good grasp of English? I haven't. We have a choice of high Corporation Tax or MNC investment. We do not have the luxury of both.

the_syco

liammur wrote: »

Corporation tax in Ireland is simply way too low. If corporations don't pay their share, tax payers will pick up the tab.

No corporations, no-one will pay tax on their earnings. Win-win. oh, wait... :pac:

later12

BOHtox wrote: »

What? We're in Ireland, MNCs come here purely for that tax.

While corporate tax is more cited than other reasons evidence from The Economist Intelligence Unit would suggest that the above statement is incorrect. It's a very interesting report if anyone wants to read it.

http://www.managementthinking.eiu.com/sites/default/files/downloads/Investing%20in%20Ireland%20FINAL%20WEB%20version.pdf

Nijmegen

Well later12, I think that's in line with what you'd expect to make a decision on if you were trying to find a place to set up a business.

Corporate tax (30%) and sector-specific tax credits (19%) combined with a stable country that has access to a large market.

Take away our access to the EU, the tax wouldn't matter. Turn the country into a striking mess, we'd erode the benefit of tax.

You need an eco-system, but the question is: If we removed the tax incentives, what do have in Ireland that would attract someone here versus, say, the Netherlands?

later12

I'm not denying the importance of the tax system at all. I think if there's one thing we can confirm from the report, it's that the CT issue is hugely relevant to foreign investment establishing in Ireland (in other news, rain is wet...). I'm simply countering the idea that "MNCs come here purely for that tax"... clearly it's not as simple as that. Ease of access to the EU markets and our corporate infrastructure/ freedom from red tape are also very relevant according to the survey.

Climber

Don't they come to Ireland because of the Blarney and the craic?
Sure Ireland is the best place in the world, land of the Saints and Scholars.

liammur

Nijmegen wrote: »

Remind me again how much FDI was contributing to our economy before EEC accession and the drop of manufacturing corporation tax to 10% (the precursor to the total drop to 12.5%)?

Or how many R&D labs were here prior to the R&D tax incentives?

Because I seem to recall Ireland being an agrarian economy with high unemployment and high emigration. Perhaps I just missed all these companies coming here for the weather.

You certainly missed something.
Before EEC accession?. This isn't the history channel we're talking about.

liammur

the_syco wrote: »

No corporations, no-one will pay tax on their earnings. Win-win. oh, wait... :pac:

And explain to me why there are 75,000 people employed in the US by Irish companies where they don't get this cheap corporation tax?

murphaph

liammur wrote: »

And explain to me why there are 75,000 people employed in the US by Irish companies where they don't get this cheap corporation tax?

A market of 300 million people? Same reason there are hundreds of thousands (if not millions) of Europeans employed by US firms all over Europe: the market.

Ireland's geographical position is not attractive. We shouldn't kid ourselves about how educated we are or how important the English language is-if these things were key, Scotland would be a huge threat, but it isn't or at least hasn't been up to now-we have taken many times more FDI than the Scots. The key difference is tax rates and if people on here get their wishes and corporation tax rates are jacked up, this FDI will dry up as there's nothing special keeping it in Ireland, indeed Ireland is more expensive for many aspects of business that are compensated for by tax breaks.

Why would I set up any manufacturing or distribution site in Ireland when I can set one up in the UK or continental Europe and ship my goods to market more cheaply, reliably and faster? Software and financial services are the exceptions of course-this can be "shipped" instantly to anywhere, though our broadband lets us down even there.

Jacking up corporation taxes (or rates) would really be economic suicide. I don't think people realise just how much of our GDP comes from FDI.

liammur

murphaph wrote: »

A market of 300 million people? Same reason there are hundreds of thousands (if not millions) of Europeans employed by US firms all over Europe: the market.

Ireland's geographical position is not attractive. We shouldn't kid ourselves about how educated we are or how important the English language is-if these things were key, Scotland would be a huge threat, but it isn't or at least hasn't been up to now-we have taken many times more FDI than the Scots. The key difference is tax rates and if people on here get their wishes and corporation tax rates are jacked up, this FDI will dry up as there's nothing special keeping it in Ireland, indeed Ireland is more expensive for many aspects of business that are compensated for by tax breaks.

Why would I set up any manufacturing or distribution site in Ireland when I can set one up in the UK or continental Europe and ship my goods to market more cheaply, reliably and faster? Software and financial services are the exceptions of course-this can be "shipped" instantly to anywhere, though our broadband lets us down even there.

Jacking up corporation taxes (or rates) would really be economic suicide. I don't think people realise just how much of our GDP comes from FDI.

Well the Americans are getting angry about this issue. They will change it. And I predict there will still be many around to turn off the lights.

Nijmegen

liammur wrote: »

You certainly missed something.
Before EEC accession?. This isn't the history channel we're talking about.

To quote you:

These companies have been coming to Ireland long before our 12.5%

Long before our 12.5% = History, right?

Well the Americans are getting angry about this issue. They will change it. And I predict there will still be many around to turn off the lights.

They've been 'angry' about it every presidential election since Carter. The US is a free market economy that ends up doing the free market thing.

Barry O'Bama was talking up corporation tax abroad in '08. Now he's our best friend. Politicians...

Instead of looking at all the benefits these companies bring Ireland - from jobs to skills that Irish workers take into Irish companies later on - some people just look at how much more they could milk the corporations for.

Well, as I said - Ireland has nothing more going than for it than to be an open economy with access to Europe at a cheap price. If that cheap price goes, the jobs will go somewhere they're sane enough not to commit economic suicide.

K-9

Wrong thread!

nfs

When the corporation tax rate is increased, corporations do not pay the tax out of their own profits, instead they pass on the tax to the people with increased prices. Its basically a tool used by to collect taxes from the people not corporations!

K-9

I do think there is an element of corporations and their automatic response to equality legislation on this, it'll mean the end of the world etc.

It should be pointed out it isn't even so much the low rate is important, other Euro and EU countries have lower or comparable rates, wage rates are probably as important, our tax rules are just as important, a good example Google paying little tax.

A 1% rise isn't going to mean the end of the world as long as the lax tax rules remain in place.

07734

murphaph wrote: »

A market of 300 million people? Same reason there are hundreds of thousands (if not millions) of Europeans employed by US firms all over Europe: the market.

Ireland's geographical position is not attractive. We shouldn't kid ourselves about how educated we are or how important the English language is-if these things were key, Scotland would be a huge threat, but it isn't or at least hasn't been up to now-we have taken many times more FDI than the Scots. The key difference is tax rates and if people on here get their wishes and corporation tax rates are jacked up, this FDI will dry up as there's nothing special keeping it in Ireland, indeed Ireland is more expensive for many aspects of business that are compensated for by tax breaks.

Why would I set up any manufacturing or distribution site in Ireland when I can set one up in the UK or continental Europe and ship my goods to market more cheaply, reliably and faster? Software and financial services are the exceptions of course-this can be "shipped" instantly to anywhere, though our broadband lets us down even there.

Jacking up corporation taxes (or rates) would really be economic suicide. I don't think people realise just how much of our GDP comes from FDI.

Spot on. I was going to post much the same argument, but I think you've put it better than I'd manage so early in the morning!

liammur

Nijmegen wrote: »

To quote you:



Long before our 12.5% = History, right?



They've been 'angry' about it every presidential election since Carter. The US is a free market economy that ends up doing the free market thing.

Barry O'Bama was talking up corporation tax abroad in '08. Now he's our best friend. Politicians...

Instead of looking at all the benefits these companies bring Ireland - from jobs to skills that Irish workers take into Irish companies later on - some people just look at how much more they could milk the corporations for.

Well, as I said - Ireland has nothing more going than for it than to be an open economy with access to Europe at a cheap price. If that cheap price goes, the jobs will go somewhere they're sane enough not to commit economic suicide.

This will be changed sooner rather than later. For instance, when Carter was president, how many Americans were abroad? Globalisation has changed everything, and the trend is only increasing.

We will need a solution other than giving corporations everything and anything they demand. Our whole model is flawed. Time will prove this to be case.

Obama proposes minimum overseas corporate tax rate; Ireland's low-tax regime/ tax haven incentives in peril
By Michael Hennigan, Finfacts founder and editor
Feb 23, 2012 - 8:21 AM

[EMAIL="?subject=Obama%20proposes%20minimum%20overseas%20corporate%20tax%20rate%3B%20Ireland%27s%20low-tax%20regime%2F%20tax%20haven%20incentives%20in%20peril&body=http%3A%2F%2Fwww.finfacts.ie%2Firishfinancenews%2Farticle_1023976.shtml"]Email this article[/EMAIL]
Printer friendly page

The Obama Administration has proposed a minimum tax on profits of US companies in foreign jurisdictions that if implemented will reduce the attraction of Ireland's low-tax foreign direct investment regime and imperil the tax haven activities of high profile companies such as Microsoft, Google and Facebook.

President Obama on Wednesday proposed the first major reform of the US corporate tax system in a quarter century and outlined a plan to cut the headline corporate tax rate to 28% from the current level of 35% while eliminating several loopholes that cut tax bills.
The Administration said: "Our tax system should not give companies an incentive to locate production overseas or engage in accounting games to shift profits abroad, eroding the US tax base." It takes aim at Ireland's low-tax system by proposing a minimum tax on foreign earnings that would "discourage a global race to the bottom in tax rates."
It would also target the tax haven activities of US companies, which we outlined last week - - Finfacts Premium provides access to comprehensive research on tax havens and tax systems in the OECD (Organisation for Economic Cooperation and Development) developed world economies.
The Administration proposes that income earned by subsidiaries of US corporations operating abroad must be subject to a minimum rate of tax. It says this would "stop our tax system from generously rewarding companies for moving profits offshore. Thus, foreign income deferred in a low-tax jurisdiction would be subject to immediate US taxation up to the minimum tax rate with a foreign tax credit allowed for income taxes on that income paid to the host country.


This minimum tax would be designed to balance the need to stop rewarding tax havens and to prevent a race to the bottom with the goal of keeping US companies on a level playing field with competitors when engaged in activities which, by necessity, must occur in a foreign country."
No specific tax threshold has been proposed.
Bipartisan US tax reform is not welcome news in Ireland which is also facing pressure from Europe on preventing companies like Facebook, which books sales revenues generated in places like Germany in Ireland and pays tax on such sales to the Irish Government.

Nijmegen

Obama proposes minimum overseas corporate tax rate; Ireland's low-tax regime/ tax haven incentives in peril

Yes, he proposed this in 2008 and now he's proposing it again in 2012.

Tell me, what do those two years share in common and what stopped him from doing it in 2009, 2010 or 2011?

Every election this comes up.

And by the by, is your solution to the US lowering its tax rate to raise ours? That'll add competitiveness...?

liammur

Nijmegen wrote: »

Yes, he proposed this in 2008 and now he's proposing it again in 2012.

Tell me, what do those two years share in common and what stopped him from doing it in 2009, 2010 or 2011?

Every election this comes up.

And by the by, is your solution to the US lowering its tax rate to raise ours? That'll add competitiveness...?

You've a lot to learn if you think Obama has our interests at heart. Talk is cheap 'Is feidir linn'. And we all bow down. GULP.

Nijmegen

liammur wrote: »

You've a lot to learn if you think Obama has our interests at heart. Talk is cheap 'Is feidir linn'. And we all bow down. GULP.

That's not my assertion at all. My assertion is that this gets raised, kicked around as populist nonsense during elections, and is quietly shelved afterwards.

Even if something did happen, raising our corporation tax is most certainly not the way to become more competitive.

liammur

Nijmegen wrote: »

That's not my assertion at all. My assertion is that this gets raised, kicked around as populist nonsense during elections, and is quietly shelved afterwards.

Even if something did happen, raising our corporation tax is most certainly not the way to become more competitive.

Fair enough. It was this I found a bit naive 'Barry O'Bama was talking up corporation tax abroad in '08. Now he's our best friend. Politicians...'

I believe the Americans have no choice but to act on this issue.
They are faced with high umeployment, tax base being eroded and debt spiralling out of control. Their economy is in bigger danger now than at any point in their history. Something has to give.