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"Ireland cannot be part of current global tax reform deal" - Donohoe

  • 15-07-2021 10:37am
    #1
    Registered Users Posts: 21,708 ✭✭✭✭ Kermit.de.frog



    I 100% agree. The way some go on about this deal you would think those promoting it are demonstrating some sort of moral imperative yet the big countries are securing opt outs to suit themselves. Look at Sunak and the City of London for example.

    We need to protect our interests here just like they ganged up to protect their own selfish interests.

    Good man Paschal 😎



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Comments

  • Registered Users Posts: 3,960 ✭✭✭ Diarmuid


    Will it matter if Ireland decides that it doesn't want to play ball. The larger nations, who provide the majority of the multinational profits, will just implement a mechanism for getting the profits out of the multinationals one way or another, in effect pushing up the effective corporate tax on Irish based multis?



  • Registered Users Posts: 1,460 ✭✭✭ WrenBoy


    Well, we cant control the actions of others so we can only do what we can on our end to ensure investment and retention of business here.



  • Registered Users Posts: 2,823 ✭✭✭ Falthyron


    I'm sure going from 12.5% to 15% will guarantee the likes of Facebook, Google, Amazon and Microsoft will start paying their full tax obligation to us going forward. Yep, absolutely, no doubt it my mind. And when that happens, it won't matter that our smaller and medium sized businesses are struggling because we will get all of that hard-earned tax money from the big companies. Yes, it's a no-brainer, really. 😏



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  • Registered Users Posts: 3,927 ✭✭✭ Cordell


    Actually those big ones pay us more than their full tax obligation to us - this is precisely the reason they transfer profits here rather than paying higher taxes in other places. Or, if you want, they artificially create more tax obligations here.

    In any case, this move to a unitary tax system would have been considered price fixing if the MNC were to do it.



  • Registered Users Posts: 7,411 ✭✭✭ Yurt2


    Well the MNCs had a completely captured sovereign state in Ireland so why would they bother. The 12.5 became this bizarre economic sacred cow, and anyone who questioned the wisdom of picking the pockets of European partners on taxation was derided as a Bolshevik.

    We could have played this smart a few years back when it was clear that the pressure would come on us from European partners and further afield (even OECD countries across the world like Japan and South Korea pay close attention to our setup and aren't exactly enamoured with it), and raised it by a percentage point or so and tightened some loopholes to make it look like we were playing ball without doing to much damage. But no, we dug in our heels and continue to do so, and countries with a lot more power are calling time on us.



  • Registered Users Posts: 12,200 ✭✭✭✭ y0ssar1an22


    tax is used to raise revenue to run a country; social programmes, infrastructure, whatever.


    maybe instead of trying to introduce a global tax rate how about stopping countries running at a deficit. if they have the power to do the former they certainly have the power to do the latter - and thats the reason these countries want a global tax rate. to fund their own excessive spending.



  • Registered Users Posts: 7,411 ✭✭✭ Yurt2


    All developed countries (with the exception of petrodollar states) run their economies on debt and have done so for a very long time. If you control your own interest rates and your own currency, you'd be a fool not to.* When you're creditworthy and interest rates are low it's madness not to issue debt to generate productivity. In fact, the world would grind to a halt economically by doing what you suggest. A country is not a household, debt is essential and in many cases desireable.

    *Ireland being in a position where interest rates are not set in our favour or with thought to our economic needs.



  • Registered Users Posts: 3,927 ✭✭✭ Cordell


    Why pay us more than 12.5%? What is the reason, why would we ask for more? Why play ball on tax increases? Are we happy with what we get at 12.5? If so, why not dig in our heels?

    It's not about sovereignty, it's about having a predictable business and finance environment. We attracted FDIs and MNCs with out corporate tax, let's not do a bait and switch now.



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  • Registered Users Posts: 12,200 ✭✭✭✭ y0ssar1an22


    i'm far from an expert on this, in fact completely clueless. it seems every country is in a mountain of debt from excessive spending over years and years. maybe they just need to tighten the purse strings, rather than trying to introduce a global tax rate designed purely to allow them to continue the excessive expenditure.


    as an aside, if every country does this, who are the ultimate debtors of all this debt? as i said, clueless on this but i dont like other countries trying to dictate our own tax policy.



  • Registered Users Posts: 3,927 ✭✭✭ Cordell


    There is at least at the EU level a cap on deficit. Not zero, but 4% of their GDP IIRC. This is where the greeks got creative with their accounts and hid a much bigger deficit, and we all know how that played out :)



  • Registered Users Posts: 7,411 ✭✭✭ Yurt2


    Because we've spent decades unapologetically practicing tax arbitrage and thumbing our nose at our neighbours. Not even playing ball on the matter to ameliorate a shock further down the road, which we're staring at right now.

    in terms of predictability, well, we've screwed the pooch on that front because we're the poster boys for this behavior and our partners have called time on us.

    We're like the drunk that thinks the hangover will never come. We've only ourselves to blame on this one, we've been running an economic policy first conceived in the 1970s and thought there was no expiry date on it. We were very good at the game, but the goalposts are being shifted, which could have been predicted, and could have been less painful if we weren't intransigent on the matter.



  • Registered Users Posts: 3,927 ✭✭✭ Cordell


    The goalpost have not shifted, if anything they shifted more into favoring our position - it's either Ireland in the dead center of the world between US and Europe or some proper tax haven somewhere in the ocean.

    What those neighbors and partners do is bullying us into changing our tax rates to suit them. Fk them.



  • Registered Users Posts: 7,411 ✭✭✭ Yurt2


    I admire your optimism on the first paragraph, I really do - don't think they aren't coming for the Cayman Islands of this world also.

    I wouldn't characterize us as being bullied in the slightest. We've been playing a high-wire game on taxation for decades now. When taxable economic activity surfaces in Ireland by the sleight of hand of cynical accounting alchemy and manipulation of taxation code, it effectively skims billions of dollars from the exchequer of other countries. That's not an economic model I'm especially proud of. It's not like when the second wave of globalization killed off the great shipbuilding industries of Belfast and Glasgow and sent the activity to the Far East, where riveters are dockworkers could once look with pride on what they built. We were and are involved in self-dealing on a global scale that took hard cash out of the accounts of countries we have to look in the eye (and countries further afield) in Brussels and say with a straight face "we're good Europeans".

    That party was always going to end.



  • Registered Users Posts: 7,411 ✭✭✭ Yurt2


    A good question and a complex one! Here is a snapshot from 2015. Every country has it's own story. Japan for instance has built up a huge amount of sovereign debt, but the good news is that it's overwhelmingly domestically held by and they are huge buyers of US debt (US T-Bills, T-Bonds, and T-Notes) which are incredibly safe debt instruments to hold as the danger of the US defaulting is close to nil.



  • Registered Users Posts: 12,200 ✭✭✭✭ y0ssar1an22


    do bonds account for the vast majority of a country's debt?



  • Registered Users Posts: 3,927 ✭✭✭ Cordell


    Well both Greece and Portugal operate a higher tax rate, over 20%. How little did it help them.



  • Registered Users Posts: 7,411 ✭✭✭ Yurt2


    Yes, when we're speaking of sovereign debt (as above) we're almost always speaking of debt issued in the international bond market.



  • Registered Users Posts: 21,708 ✭✭✭✭ Kermit.de.frog


    You are assigning a moral stance that does not apply to any country in the world. Countries don't have morals. They have self interest. And that's it.

    What you want this country to do is shoot itself in the head and return to poverty because you think it's "right".

    As I said in the OP - the UK govt secured an opt out for financial services in the City of London.

    Why should we do what you suggest? There is no benefit to us. None.



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  • Registered Users Posts: 7,411 ✭✭✭ Yurt2


    Our interests would have been served heading this off at the pass years ago by making some move to adjust the rate upwards slightly and close off some of the more egregious loopholes. Instead, we kept our hand in the till like idiots and expected nothing to change when we were and are one of the worst offenders. A country like Germany or the US can afford to give others the middle finger every now and again with core national interests; Ireland? Not so much.

    And on the poverty matter: If your health and wealth is based on one variable, a tax rate of 12.5 or nothing else, and any suggestion of any adjustment is met with Chicken Little cries of the sky is falling, don't get surprised when you do nothing, and countries you're depriving of tax take actually make the sky fall on you because of recalcitrance.

    The needle has moved on this and it's not going back. The time to take action was years ago. Now we're a small country with our name in the bad books asking bigger countries to be nice with us. Not a good position.



  • Registered Users Posts: 12,200 ✭✭✭✭ y0ssar1an22


    korea for example. about 70% of their debt is to their own citizens?


    does the IMF not come into this? are they featured in the data?


    all these banks that are owed money, they also owe money up the chain. I want to know who the ultimate beneficiary of all this debt is. in that, if everyone owes money to everyone, there must be a mechanism to contra all that debt.


    i think that would make a great economics paper.



  • Registered Users Posts: 21,708 ✭✭✭✭ Kermit.de.frog


    We are a small country with no natural resources worth mentioning. So we have to make our way the best we can. That is best done through tax competition and if other countries want to compete and beat us that way - no problem whatsoever.

    Under no circumstances should this country sign up to this agreement as it stands.

    We need a bone, and a fairly big one, and that's what the govt is negotiating just like the bone thrown to the Brits over the City of London.



  • Registered Users Posts: 22,344 ✭✭✭✭ Dyr


    When did an Irish Government last stand up for our best interests, Pascal will dance to whatever tune is playing in Brussels



  • Registered Users Posts: 7,411 ✭✭✭ Yurt2


    In Korea's case, and it is a su generis case, their large corporations like Samsung and Hyundai hold significant amounts of government debt.

    That's the point, everybody does owe money to everybody else!

    The IMF do issue bonds but that is a recent development. It is funded via quota arrangements from countries (the US being the largest contributor) and bilateral loan agreements.



  • Registered Users Posts: 12,200 ✭✭✭✭ y0ssar1an22


    just to focus on one point (cos as i said, i dont have a notion).


    there is no way everyone can owe everyone! if world debt was frozen right now, and repaid, who gets what?



  • Registered Users Posts: 3,304 ✭✭✭ jackboy


    Almost all the debt isn’t actually borrowed from anyone. It’s not real. It’s just numbers created on computer. It’s a classic pyramid scheme but on a monstrous scale.



  • Registered Users Posts: 7,598 ✭✭✭ Markcheese


    Why can't everyone owe everyone else ? It's fiat currencies - they exist because banks/governments say so - and everyone uses them -

    A bank has a billion in deposits - so it's allowed lend 10 billion out - it lends billion to a big company ,who deposits it in a different bank - allowing them to now lend out 10 billion .

    . The money doesn't exist till it's lent out ....more or less

    Slava ukraini 🇺🇦



  • Registered Users Posts: 7,598 ✭✭✭ Markcheese



    Slava ukraini 🇺🇦



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  • Registered Users Posts: 3,304 ✭✭✭ joseywhales


    In some ways it might be good to have a lot of debt(with hopefully low rates) as you will make a large enough disruption if you default that it is in other's interest that you don't.



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