Hungary to lower corporate tax to 9%

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Hungary to undercut Ireland's corporate tax rate, offering EU's lowest rate at 9%

With the US looking to cut its corporate tax rate from 35% to 15% and now Hungary. How can Ireland look to remain competitive?

Is the IT infrastructure, English speaking and low corporate tax rate the only reason why companies setup here? Ireland has dismal national infrastructure, in terms of roads and housing and available office space.

Is this the beginning of the end for Ireland?

That being said, Bulgaria has a lower tax rate than Ireland (10%) and that hasn't helped them attract much in the way of FDI and have actually decreased it's FDI this year by €3.70 Million

:pac:
Conspiracy theory: Is this a play from the heads of EU to force a normalized corporate tax rate across the EU?

Mr.H

Surely we can't have a reduced corporation tax to take business from other countries then cry when other countries use the same tactics to compete for business?

We can't have it all our way

Jimbob1977

Lacey Slow Home wrote: »

Hungary to undercut Ireland's corporate tax rate, offering EU's lowest rate at 9%

With the US looking to cut its corporate tax rate from 35% to 15% and now Hungary. How can Ireland look to remain competitive?

Is the IT infrastructure, English speaking and low corporate tax rate the only reason why companies setup here? Ireland has dismal national infrastructure, in terms of roads and housing and available office space.

Is this the beginning of the end for Ireland?

That being said, Bulgaria has a lower tax rate than Ireland (10%) and that hasn't helped them attract much in the way of FDI and have actually decreased it's FDI this year by €3.70 Million

:pac:
Conspiracy theory: Is this a play from the heads of EU to force a normalized corporate tax rate across the EU?

Ireland has other factors in its favour, especially English as a first language. That's a major competitive advantage.

In relative terms, Irish workers are productive, well-educated and well-trained.

Hungarians would have a high standard of education also, but English fluency is a major plus.

CalamariFritti

Well that's the thing isn't it? We've all been on and on about how smart our tax rate is when in reality it's not all that smart. Anyone can do it. And it's success is really depending on not everyone doing it. As that would just lead to a race to the bottom which is going to cost us all.

ancapailldorcha

Hungary also has an anti-immigration prime minster and lacks English as their primary language. I wouldn't be too worried.

K-9

CalamariFritti wrote: »

Well that's the thing isn't it? We've all been on and on about how smart our tax rate is when in reality it's not all that smart. Anyone can do it. And it's success is really depending on not everyone doing it. As that would just lead to a race to the bottom which is going to cost us all.

The rules are just as important, if not more so than our rate, hence Apple, Google etc.

In the race to the bottom now joined by the UK and the US I predict we'll be paying multi nationals to stay here in 10 years time!

mahoganygas

Mr.H wrote:

Surely we can't have a reduced corporation tax to take business from other countries then cry when other countries use the same tactics to compete for business?

K-9 wrote:

In the race to the bottom now joined by the UK and the US I predict we'll be paying multi nationals to stay here in 10 years time!

Ireland's corporate tax rate hasn't changed materially in decades. There is no race to the bottom.

It's the combination of an English speaking nation, an educated workforce, excellent broadband in cities, as well as low corporate tax rates which attracts FDI.

The low corporate tax rate is an easy target for left wing parties. I think it gets way too much attention.

K-9

mahoganygas wrote: »

Ireland's corporate tax rate hasn't changed materially in decades. There is no race to the bottom.

It's the combination of an English speaking nation, an educated workforce, excellent broadband in cities, as well as low corporate tax rates which attracts FDI.

The low corporate tax rate is an easy target for left wing parties. I think it gets way too much attention.

And I think the above factors gets too much attention as it is essentially the Government line.

Multi nationals like Google have been giving out about our education system for years, we've had complaints about our low uptake in maths, science and languages with not that much done about it.

Maybe the IFSC wasn't a success because of lax regulations and very low effective tax rates.

And my post pointed out it isn't really the rate that is that attractive, it's the "business friendly" rules. Ireland didn't see itself as an international finance centre until the late 80's and that only took off in the mid 90's after lobbying from the banking industry.


But maybe the bottom line isn't that important after all and those other factors really do matter that much.

mahoganygas

K-9 wrote:

And I think the above factors gets too much attention as it is essentially the Government line.

Just because the government agrees with this proposition doesn't make it any less true.
Surveys with MNC's always cite these same factors.

K-9 wrote:

Multi nationals like Google have been giving out about our education system for years, we've had complaints about our low uptake in maths, science and languages with not that much done about it.

There are literally hundreds of other MNC's in Ireland. Some worth many times what Google contribute to our economy.

K-9 wrote:

Maybe the IFSC wasn't a success because of lax regulations and very low effective tax rates.

The IFSC has been a massive success.

K-9

Who has told you the IFSC was a great success? The Irish Government, the finance industry that depends on it?

Maybe you should ask the German tax paper if the IFSC was a great success. It was considered a running joke and the wild west during the bubble years by other countries but I suppose there's the jobs.

mahoganygas

K-9 wrote:

Maybe you should ask the German tax paper if the IFSC was a great success. It was considered a running joke and the wild west during the bubble years by other countries but I suppose there's the jobs.

By some commentators in other countries. It all depends on who you believe, a point you have well made.

But let's assume you're right, that the IFSC was the wild west, that lax regulation in the IFSC somehow cost the German taxpayer money and that the only benefit Ireland got out of it was jobs.... So what?

How does any of that make the IFSC anything but a success for Ireland?

This particular industry takes very little from Ireland and in return provides tens of thousands of middle income jobs. That's a lot of income tax to the exchequer.

What did it cost us?

emptynest

A 64Bn Bailout

srsly78

That was from bailing out domestic banks, nothing to do with the IFSC. There were banks that failed in the IFSC, but it didn't cost us anything - it cost the Germans.

Saipanne

I've been saying it for years, it should be set to zero.

K-9

mahoganygas wrote: »

By some commentators in other countries. It all depends on who you believe, a point you have well made.

But let's assume you're right, that the IFSC was the wild west, that lax regulation in the IFSC somehow cost the German taxpayer money and that the only benefit Ireland got out of it was jobs.... So what?

How does any of that make the IFSC anything but a success for Ireland?

This particular industry takes very little from Ireland and in return provides tens of thousands of middle income jobs. That's a lot of income tax to the exchequer.

What did it cost us?

Ok, we probably aren't going to agree as you seem to see it as zero cost, or mostly gains anyway:

http://www.rte.ie/news/business/2016/1123/833762-ireland-reluctant-to-host-high-risk-bank-trading-a/

Just in the news today, would be interesting to see if there was much pressure from the European side. "Guys, you couldn't regulate what you had in 07/08, make sure you can deal with what you already have before looking for more".

Lax regulations and low Corporation tax rates are great while it lasts but there's long term damage. Germany and other European countries don't want another DEPFA and the UK and US are now planning to go to 15% tax rates.

mahoganygas

Agree to disagree, and happy to move on.

These are two very different sectors of financial services. Dublin was never going to be a base for front office trading. We simply don't have the skilled workforce for it.

Dublin's speciality is back office administration and posing as a location to domicile funds.

I would take this article with a huge pinch of salt. The IFSC was never in the running for these trading desks. But negotiations are still ongoing so I assume we want to appear as accommodating as possible.

I think it's also important to point out that the Irish financial regulator was lax in regard to domestic banks. The IFSC sits largely outside the Irish retail and commercial banking sector.

K-9

Oh agreed it sits outside, but it's still in Dublin and seen as Irish regulated. It's reputational damage, though I know some people see that as just collateral damage!

Kind of reminds me of the outrage at the German ambassadors comments about Ireland in 07! Touched a raw nerve that one.

blackwhite

Lacey Slow Home wrote: »

Hungary to undercut Ireland's corporate tax rate, offering EU's lowest rate at 9%

With the US looking to cut its corporate tax rate from 35% to 15% and now Hungary. How can Ireland look to remain competitive?

Is the IT infrastructure, English speaking and low corporate tax rate the only reason why companies setup here? Ireland has dismal national infrastructure, in terms of roads and housing and available office space.

Is this the beginning of the end for Ireland?

That being said, Bulgaria has a lower tax rate than Ireland (10%) and that hasn't helped them attract much in the way of FDI and have actually decreased it's FDI this year by €3.70 Million

:pac:
Conspiracy theory: Is this a play from the heads of EU to force a normalized corporate tax rate across the EU?

Hungary has been successful in attracting a lot of shared service centres in the last 10 years. I'd imagine this will help further.

Kadser

K-9 wrote: »

Who has told you the IFSC was a great success? The Irish Government, the finance industry that depends on it?

Always wondered why the IFSC never gets photographed much. Anytime there's a Brexit article in a newspaper the photographer seems to include the whole city centre except there.

mahoganygas

Kadser wrote:

Always wondered why the IFSC never gets photographed much. Anytime there's a Brexit article in a newspaper the photographer seems to include the whole city centre except there.

Except where? The IFSC is no longer confined to the north docks. To avail of membership you can now locate in Cork, Galway, Waterford, Naas, outside the M50, anywhere really.