Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Ireland and corporate tax avoidance

Options
1356789

Comments

  • Options
    #62
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    antoobrien wrote: »
    No google in Ireland provide services across Europe from Ireland, the same way as paddypower provide services across Europe from the Isle of Man. Those services are not sold to the UK or French etc entities, they are sold to the customers in those countries.

    Many software companies have "manufacturing" facilities here so that when they ship software (i.e. disks) it is shipped from the Irish (often EMEA) entity, rather that he local one. There's a reason why amazon, MS etc have big data centres here.

    Do Tesco pay tax in Ireland? If they started importing all their produce, then they wouldn't have to, right?


  • Options
    #63
    antoobrien
    Registered Users Posts: 6,106 ✭✭✭antoobrien


    TheVman wrote: »
    It has been basically ****ing the rest of Europe on this issue for years

    Actually Ireland is not the problem, at least with google (see this article for an idea of how it's perfectly legal to do what they are doing), it's the Dutch laws.

    In short Ireland have tax laws that mean it is expensive for companies to send money outside, the Dutch do not. So the reason that google et al pay damn all EU tax is not Irish corporation tax rates, it's even more generous Dutch taxes.


  • Options
    #64
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    Fratton Fred wrote: »
    Do Tesco pay tax in Ireland? If they started importing all their produce, then they wouldn't have to, right?

    They pay taxes as they have a retail presence here. I explained this already. I even used a normal retail example - cf cadburys. What they sell is produce in retail located here, what Google sells is server space in Ireland.

    Heres a question for you.

    I use 4OD here in Ireland.
    It has advertising.
    Some of the advertising is Irish - Irish accents etc.
    Where do they pay taxes on that income - note that all content and IP is in Britain.

    I watch Sky here in Ireland.
    It has advertising.
    Some of the advertising is Irish - Irish accents etc.
    Where do they pay taxes on that income - note that all content and IP is produced in Britain.


    And the answer to both, is Britain.

    Can you see why?


  • Options
    #65
    antoobrien
    Registered Users Posts: 6,106 ✭✭✭antoobrien


    Fratton Fred wrote: »
    Do Tesco pay tax in Ireland? If they started importing all their produce, then they wouldn't have to, right?

    The difference between Tesco and say MS or Oracle is that in the republic of Ireland one does not buy foods off Tesco UK and they use local suppliers e.g. Kerry Group etc. The profits after tax are sent to Tesco (UK) as the parent company of Tesco (Ireland*). When you buy of MS, Oracle or Google, you are buying of the entity based in Dublin.

    The local model is not how many of the tech firms operate, which is the sticking point for most people on how so many sales are made through Ireland.

    *Not sure of the exact legal entities involved, could be Tesco ROI & Worldwide etc.


  • Options
    #66
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    antoobrien wrote: »
    Actually Ireland is not the problem, at least with google (see this article for an idea of how it's perfectly legal to do what they are doing), it's the Dutch laws.

    In short Ireland have tax laws that mean it is expensive for companies to send money outside, the Dutch do not. So the reason that google et al pay damn all EU tax is not Irish corporation tax rates, it's even more generous Dutch taxes.

    Which means that the claim that they are here for the tax rate is a bit spurious, since they could be in Holland and avail of that rate directly.

    In short Ireland could do well out of this panic.


  • Advertisement
  • Options
    #67
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    antoobrien wrote: »
    The difference between Tesco and say MS or Oracle is that in the republic of Ireland one does not buy foods off Tesco UK and they use local suppliers e.g. Kerry Group etc. The profits after tax are sent to Tesco (UK) as the parent company of Tesco (Ireland*). When you buy of MS, Oracle or Google, you are buying of the entity based in Dublin.

    The local model is not how many of the tech firms operate, which is the sticking point for most people on how so many sales are made through Ireland.

    *Not sure of the exact legal entities involved, could be Tesco ROI & Worldwide etc.

    So, if Tesco Ireland ceases to exist, Tesco UK can supply all stores in Ireland through its warehouse in Newry and mot pay any tax?


  • Options
    #68
    maninasia
    Registered Users Posts: 4,616 ✭✭✭maninasia


    Duggys Housemate wrote: »
    The investigation in the US has more moral merit, but no legal merit. The Americans are claiming that all moneys earned abroad by American headquartered companies should be repatriated after taxes are paid and immediately. At least there is some merit, as most of the Intellectual Property is created there. However whats sauce for the Goose is sauce for the Gander. American companies based in America but owned abroad should repatriate their profits abroad, and not re-invest there.

    What the American government should or shouldn't decide will be up to them.
    At the moment American individuals must pay tax on income generated outside of the US.

    Why do corporations get a free pass on this?

    There is no real logic in tax laws if you look at it from the outside.


  • Options
    #69
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    Fratton Fred wrote: »
    So, if Tesco Ireland ceases to exist, Tesco UK can supply all stores in Ireland through its warehouse in Newry and mot pay any tax?

    Christ we explained this remedially.

    A retail presence is taxed on its profits. A wholesaler sells to its retail arm at wholesale prices. Tesco is not the wholesaler, the wholesaler is Kelloggs etc.

    If however people in the Republic were to order something from Newry via Tesco online it would be taxed in the UK. In fact that works with anything I order from the UK.

    Do you really not understand this?


  • Options
    #70
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    maninasia wrote: »
    What the American government should or shouldn't decide will be up to them.
    At the moment American individuals must pay tax on income generated outside of the US.

    Why do corporations get a free pass on this?

    There is no real logic in tax laws if you look at it from the outside.

    The same laws apply to both, you can exclude taxation in the country you live in if there is a double taxation law with that country. Apple etc. are avoiding sending money back to the US because then they pay <the american rate> minus <the European rate> which as we have seen is 0%.

    But you have to send it back to be taxed.

    If Congress got too uppity about this companies would just make Ireland their global headquarters.


  • Options
    #71
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    Duggys Housemate wrote: »
    They pay taxes as they have a retail presence here. I explained this already. I even used a normal retail example - cf cadburys. What they sell is produce in retail located here, what Google sells is server space in Ireland.

    Heres a question for you.

    I use 4OD here in Ireland.
    It has advertising.
    Some of the advertising is Irish - Irish accents etc.
    Where do they pay taxes on that income - note that all content and IP is in Britain.

    I watch Sky here in Ireland.
    It has advertising.
    Some of the advertising is Irish - Irish accents etc.
    Where do they pay taxes on that income - note that all content and IP is produced in Britain.


    And the answer to both, is Britain.

    Can you see why?

    isn't about where the server is, it is where the sale is transacted. Otherwise why not just build a data centre in Bermuda? Google claim they don't have a retail presence in the UK, yet they employ hundreds of sales people.

    it is blatant tax avoidance which the Irish tax rules facilitate. Unfortunately Ireland can do nothing about it.


  • Advertisement
  • Options
    #72
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    maninasia wrote: »
    Why do corporations get a free pass on this?
    Because corporations don't have citizenship.

    I think the more valid question is why US citizens have to pay tax on income outside of the US regardless of where they live. It's taxing someone based on an incident of birth and is exceptionally unfair.
    isn't about where the server is, it is where the sale is transacted. Otherwise why not just build a data centre in Bermuda? Google claim they don't have a retail presence in the UK, yet they employ hundreds of sales people.
    Because Bermuda isn't part of the EU and the transaction would subject to different taxation rules.

    Traditional transaction taxation is unable to keep up with modern developments. What Google are doing is the same as having a call centre in the UK which talks to the clients, but then the clients ring a separate call centre in Ireland and make the transaction with an Irish company. The transaction is not taking place in the UK even though the pre-sales are.

    If countries are sore about this, then they need to come up with new taxation models which don't try to apply the archaic taxation regimes on modern business models. Companies will continue to run rings around these models no matter what they do.


  • Options
    #73
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    Fratton Fred wrote: »
    isn't about where the server is, it is where the sale is transacted. Otherwise why not just build a data centre in Bermuda? Google claim they don't have a retail presence in the UK, yet they employ hundreds of sales people.

    it is blatant tax avoidance which the Irish tax rules facilitate. Unfortunately Ireland can do nothing about it.

    No. YOu are confusing two issues.

    1) Google not paying tax in Ireland - but sending it to Bermuda via Holland.
    2) The UK claim that corporation tax is made on sales where the customer is. It isn't.

    Google can employ who they want in the UK, I am sure that 40d and Sky have representatives over here when they sell advertising to Irish customers. Its where the sales are finally credited to - Sky UK, or Google IReland - which counts.

    In any case even if Google were charged on their sales in the UK via UK representatives, it would make little difference. Mostly people compete for keywords online, I was amazed that they needed to sell this stuff to anybody, wouldn't people know?


  • Options
    #74
    maninasia
    Registered Users Posts: 4,616 ✭✭✭maninasia


    Duggys Housemate wrote: »
    The same laws apply to both, you can exclude taxation in the country you live in if there is a double taxation law with that country. Apple etc. are avoiding sending money back to the US because then they pay <the american rate> minus <the European rate> which as we have seen is 0%.

    But you have to send it back to be taxed.

    If Congress got too uppity about this companies would just make Ireland their global headquarters.

    I recall that corporations are treated as individuals under US law.

    However I understand that American individuals have limits whereby they don't have to pay tax on overseas earnings, something like anything less than 80,000 USD as long as they file a report every year.

    How do corporations get away with paying no tax on overseas income if they are earning billions in income globally?


  • Options
    #75
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    maninasia wrote: »
    I recall that corporations are treated as individuals under US law.

    However I understand that American individuals have limits whereby they don't have to pay tax on overseas earnings, something like anything less than 80,000 USD as long as they file a report every year.

    How do corporations get away with paying no tax on overseas income if they are earning billions in income globally?

    Both have double taxation agreements. Americans living here don't have to pay tax there if they are taxed here regardless of the rate here. *

    Same with corporations except corporations have to pay the difference when they repatriate. Which is a form of double taxation.


    * and in most countries you don't have to make any returns if you don't live in your country of birth/citizenship. American citizenship is like a branding.


  • Options
    #76
    maninasia
    Registered Users Posts: 4,616 ✭✭✭maninasia


    seamus wrote: »
    Because corporations don't have citizenship.

    I think the more valid question is why US citizens have to pay tax on income outside of the US regardless of where they live. It's taxing someone based on an incident of birth and is exceptionally unfair.

    Because Bermuda isn't part of the EU and the transaction would subject to different taxation rules.

    Traditional transaction taxation is unable to keep up with modern developments. What Google are doing is the same as having a call centre in the UK which talks to the clients, but then the clients ring a separate call centre in Ireland and make the transaction with an Irish company. The transaction is not taking place in the UK even though the pre-sales are.

    If countries are sore about this, then they need to come up with new taxation models which don't try to apply the archaic taxation regimes on modern business models. Companies will continue to run rings around these models no matter what they do.

    There is a taxation concept called Minimum Taxation whereby corporations could be forced to pay a minimum percentage of earnings or wealth every year.

    http://www.afaanz.org/openconf/2009/modules/request.php?module=oc_program&action=view.php&id=51
    The concepts can be categorized with respect to the tax object they are linked to.
    Thus minimum taxation can be linked to income (Germany, Austria, Brazil, France,
    Poland and USA) and to wealth. Further, the wealth tax is a widespread second-best
    tool to prevent tax evasion (e.g. Luxembourg, Switzerland, France, Spain and
    Norway). It rarely emerges as a form of minimum taxation. The Netherlands
    operates an example of such a non-profit oriented minimum (wealth) tax that goes
    by the name of “presumptive capital income tax”.1


  • Options
    #77
    draiochtanois
    Registered Users Posts: 2,655 ✭✭✭draiochtanois


    This post has been deleted.


  • Options
    #78
    gallag
    Banned (with Prison Access) Posts: 3,355 ✭✭✭gallag


    The we ants arguing about the mega corps billions, our countries need to work together to get more back from these companies who make billions of us. If every county had a fair standardised corp tax we would all be better of, so what if it makes some companies pull out if the revenue from the remaining ones is many times higher. If the company's paid the fair amount we would all have more money in our pockets, trade would increase between countries and the only negative would be a few billionaires bank accounts would grow slightly slower.


  • Options
    #79
    maninasia
    Registered Users Posts: 4,616 ✭✭✭maninasia


    Duggys Housemate wrote: »
    Both have double taxation agreements. Americans living here don't have to pay tax there if they are taxed here regardless of the rate here. *

    Same with corporations except corporations have to pay the difference when they repatriate. Which is a form of double taxation.


    * and in most countries you don't have to make any returns if you don't live in your country of birth/citizenship. American citizenship is like a branding.

    Many wealthy Asians are dropping their American citizenship like hot potatoes. The American govt has forced through data sharing of account and property registers in many Asian countries and it is getting harder for them to hide their money from Uncle Sam.


  • Options
    #80
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    seamus wrote: »
    Because corporations don't have citizenship.

    I think the more valid question is why US citizens have to pay tax on income outside of the US regardless of where they live. It's taxing someone based on an incident of birth and is exceptionally unfair.

    Because Bermuda isn't part of the EU and the transaction would subject to different taxation rules.

    Traditional transaction taxation is unable to keep up with modern developments. What Google are doing is the same as having a call centre in the UK which talks to the clients, but then the clients ring a separate call centre in Ireland and make the transaction with an Irish company. The transaction is not taking place in the UK even though the pre-sales are.

    If countries are sore about this, then they need to come up with new taxation models which don't try to apply the archaic taxation regimes on modern business models. Companies will continue to run rings around these models no matter what they do.

    If you believe the Google line. If Tesco claimed their checkouts are operated from a server in Luxembourg and the store staff are all pre sales, would they get away with it?

    The rules are old and they are archaic, which is why the G8 want to tighten them up..


  • Options
    #81
    creeper1
    Registered Users Posts: 651 ✭✭✭creeper1


    I think we all have to remember through this that the bad guys are the bankers.

    Don't forget this for one second.

    Corporations go bust if they don't produce something people want.

    With banks it's heads we win and tails you lose.

    They have upside and no downside.

    Never put negative feelings towards the wrong place. The bankers are the real evil in society and the economy.


  • Advertisement
  • Options
    #82
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    gallag wrote: »
    The we ants arguing about the mega corps billions, our countries need to work together to get more back from these companies who make billions of us. If every county had a fair standardised corp tax we would all be better of, so what if it makes some companies pull out if the revenue from the remaining ones is many times higher. If the company's paid the fair amount we would all have more money in our pockets, trade would increase between countries and the only negative would be a few billionaires bank accounts would grow slightly slower.

    Utter rubbish. Corporation tax does not benefit, or harm, billionaires. Just the companies and shareholders - none are billionaires.


  • Options
    #83
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    Fratton Fred wrote: »
    If you believe the Google line. If Tesco claimed their checkouts are operated from a server in Luxembourg and the store staff are all pre sales, would they get away with it?

    The rules are old and they are archaic, which is why the G8 want to tighten them up..

    No because the physical items being sold are in Tesco UK ( or Ireland).

    Surely you are getting this? The item which Google sells is advertising. What brings people to a goole search page, is the content of that page. That is, the search results. Which are not in the UK. Nor is the IP owned by a UK company.

    There can be no tightening up on this - there can be in the bermuda/holland taxation issue. But not on this. If you want this "fixed" then every country in the world would have to agree that any advertising ( or anything) sold via internet to a customer within its borders would be taxed to that country, meaning all companies with an internet presence would submit tax (And/or VAT )returns to all countries where the internet existed and generated a sale. App developers would make 100's of tax returns.



    Never going to happen.


  • Options
    #84
    gallag
    Banned (with Prison Access) Posts: 3,355 ✭✭✭gallag


    Duggys Housemate wrote: »
    Utter rubbish. Corporation tax does not benefit, or harm, billionaires. Just the companies and shareholders - none are billionaires.

    No companies share holders are billionaires? Lol.


  • Options
    #85
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    gallag wrote: »
    No companies share holders are billionaires? Lol.

    Did I say that? Most aren't. Most are pension funds and normal people. And corporation tax is only vaguely related to dividends, or other returns. Selling stock generates a tax of 15% int he US


  • Options
    #86
    gallag
    Banned (with Prison Access) Posts: 3,355 ✭✭✭gallag


    Duggys Housemate wrote: »
    Did I say that? Most aren't. Most are pension funds and normal people. And corporation tax is only vaguely related to dividends, or other returns. Selling stock generates a tax of 15% int he US

    Yes you did say that. Are you saying the super rich do not benefit by low corp tax?


  • Options
    #87
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    gallag wrote: »
    Yes you did say that. Are you saying the super rich do not benefit by low corp tax?

    Yes I am. They do benefit from low dividend and capital gains tax which are taxes at 15% in the US.


  • Options
    #88
    who_me
    Registered Users Posts: 3,669 ✭✭✭who_me


    Duggys Housemate wrote: »
    The Dept. of Finance said that was incorrect. There are no negotiations with separate companies here. They pay 12.5% on what they declare.

    And where do you think these companies owe taxes?

    1) Here?
    2) The UK where they have the audacity to sell stuff?
    3) The US?

    If you believe 3) then you can't believe 1).

    ( 2 is just rubbish).

    Well, Tim Cook (Apple CEO) is testifying to a US Senate committee today, and repeated "Our companies pay the appropriate taxes in Ireland as per our agreement with the Irish government." If they're paying the standard rate, why would they need an agreement?

    As for where they pay tax, I don't particularly care (bar the obvious "here please!"), but it should be consistent across jurisdictions to avoid cross-border tax loopholes. If you're following Cook's testimony, they're clearly taking advantage of ambiguity (whether unintentional or deliberate) in the wording of Irish tax law.

    If we feel corporations should pay no tax than fine, let's enact that in law. But let's not have a situation where large successful corporations pay little or no tax while smaller, less successful business pay more. Apart from the fairness argument, that's just not practical.


  • Options
    #89
    gallag
    Banned (with Prison Access) Posts: 3,355 ✭✭✭gallag


    Duggys Housemate wrote: »
    Yes I am. They do benefit from low dividend and capital gains tax which are taxes at 15% in the US.

    They sure do, they benefit from all low taxes, even a low corp tax.


  • Options
    #90
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    who_me wrote: »
    Well, Tim Cook (Apple CEO) is testifying to a US Senate committee today, and repeated "Our companies pay the appropriate taxes in Ireland as per our agreement with the Irish government." If they're paying the standard rate, why would they need an agreement?

    As for where they pay tax, I don't particularly care (bar the obvious "here please!"), but it should be consistent across jurisdictions to avoid cross-border tax loopholes. If you're following Cook's testimony, they're clearly taking advantage of ambiguity (whether unintentional or deliberate) in the wording of Irish tax law.

    If we feel corporations should pay no tax than fine, let's enact that in law. But let's not have a situation where large successful corporations pay little or no tax while smaller, less successful business pay more. Apart from the fairness argument, that's just not practical.

    Again there is no special agreement. The Business Insider link earlier demonstrated the issue.

    Apple ( et Google et al) created management companies in bermuda. Where they file for tax.
    This would be illegal, or penalized under Irish law so they divert through Holland where we have transfer agreements.
    Holland doesn't penalize on this, so the revenue is transferred to Bermuda without penalty.

    Arguably IReland is a victim here. But be clear - the UK isn't.

    If Holland died it's law, and the UK fixed their off shore accounts, we would get that money. Which would be nice.


  • Advertisement
  • Options
    #91
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    Duggys Housemate wrote: »
    Again there is no special agreement. The Business Insider link earlier demonstrated the issue.

    Apple ( et Google et al) created management companies in bermuda. Where they file for tax.
    This would be illegal, or penalized under Irish law so they divert through Holland where we have transfer agreements.
    Holland doesn't penalize on this, so the revenue is transferred to Bermuda without penalty.

    Arguably IReland is a victim here. But be clear - the UK isn't.

    If Holland died it's law, and the UK fixed their off shore accounts, we would get that money. Which would be nice.

    If Ireland is irrelevant to all this, why are These companies here? The weather?


Advertisement