12.5% Tax gone

FFVII

How long before the affects of this smash little old Ireland back to the 80s? 10-15 years? At least 2 Billion € gone straight away and the MNCs as quick as they can organise alternative Locations. Which Company will be first to leave? Abbotts?

100,000 direct jobs gone.

What sorta deal did Donoghue get for doing this?

Probably gave away the right to change it back aswell.

GoogleBot

https://www.boards.ie/discussion/2058213565/12-5-tax-gone

Probably consequences of paying 350 a week welfare. No one wants to go back to work. I see salary rise in labour market.

Parachutes

What was the reasoning of making such a shoot-yourself-in-the-foot move? 🤔

JPup

The general consensus is that this isn’t a bad deal at all for Ireland and a lot better than the worst possible outcomes envisaged a couple of years ago.

Where do you imagine these 100,000 jobs will go to if nowhere can charge less than Ireland’s 15% rate and all major economies (US, UK, Germany, France, China, Japan etc) are charging more?

StupidLikeAFox

What's the logic behind the 2 billion cost of this, sure they will have to pay minimum 15% wherever the move to and ireland will be at the very minimum of 15%. Also they uptick in those that won't move will surely soften the blow

NIMAN

I honestly don't see too many, if any MNCs, upping and moving out.

Why would they? To make major relocation costs to other countries with similar tax rate? Where could they all go which would be better financially for them?

So in the end, it might actually bring in more money for us as a state. Time will tell I suppose.

Beasty

15% is fine and most major multinationals based in Ireland are happy with it. They are not going to relocate. It would have been nice if they had introduced a participation exemption at the same time, but that's no big deal. Companies are very unlikely to relocate on the back of this.

NIMAN

How did we lose 2bn straight away?

Pawwed Rig

https://www.boards.ie/discussion/comment/118033948#Comment_118033948

What kind of participation exemption?

Vestiapx

Abbot were huge in germany in the 90's paying their sci ser (scientific services) staff €30,000 basic and German corpo rates and getting things going. Then they came to Ireland and paid the sci ser 20k and got the Ida grants and the low figs and paid Irish corpo rates . Little by little they moved stuff here from there.

Can't help but think this will drag, hope it dosen't but I worry it will

RedXIV

Whole bunch of things attract US MNCs here, not just the lower tax rate.

• Native English speaking populace
• Closest point in Europe to travel to
• Closest point in Europe for time difference
• Cultural ties to Ireland
• Pre-existing workforce already in place for loads of multi-nationals as it is
• Relatively low levels of corruption
• Existing tax breaks around patents, industries and other financial benefits outside the 12.5%.

At this point, companies that have invested here will find it more expensive to move out and relocate somewhere else rather than a 2.5% increase in tax that they can move around with creative accounting anyway

greyday

https://www.boards.ie/discussion/comment/118034012#Comment_118034012

Labour costs are not a decisive factor with Big Multinationals.

Beasty

https://www.boards.ie/discussion/comment/118034002#Comment_118034002

We need exemptions from Capital Gains Tax and dividend income from substantial shareholdings, similar to UK rules. These taxes are relatively easy to avoid, but it's much better optically if the State is not seen to be condoning such planning. Ireland also taxes investment companies at 25% - higher than many other countries. It's mainly targeting property investment, but in non-property scenarios it again is easy to avoid. It would have been much better to go with a single 15% rate across the board as Ireland gets no credit whatsoever for the 25% rate, and again pretty much condones avoidance.

riclad

It's not just the Irish corporation tax rate , its other things they can do like get tax credits for patents , ip transfer rights by having a head office in Ireland, is google going to move to Italy, france etc where taxs are 20 per cent plus , unlikely

The problem i see is what new company will move to Ireland when rents are so high even middle class workers are struggling, and house prices are out of control

I read an article an American ulture fund can buy houses in Ireland rent them out and pay maybe 2 per cent on the rental income by using various taxation credits

Real Donald Trump

No panic lads, Michael will sort it out

The Spy Queen

Mary Lou will be the one who will have to pick up the pieces in the future . its all a tactic to ensure SF fall at the first hurdle.

Pawwed Rig

https://www.boards.ie/discussion/comment/118034046#Comment_118034046

Gotcha. There are a couple of exemptions there (626B for example) but there has been no lobbying for any of the other things you mentioned.

Peregrinus

https://www.boards.ie/discussion/comment/118033982#Comment_118033982

We don't, not as a result of the rise in the tax rate.

But there's a second change being made as part of the same deal, under which multinational firms become subject to tax in the countries where they have business activities and earn profits, regardless of whether firms have a physical presence there. So the profits you make by providing services to people in (say) Germany will be partly taxable in Germany, instead of (as up to now) being wholly taxable in whatever jurisdiction you have based your operation in.

This only applies to multinationals which are large (global sales in excess of €20 billion annually) and profitable (profitablity above 10%). But there's quite a few of those established in Ireland who up to now have been booking their profits in Ireland and paying tax here. A share of those profits will now be booked in other countries and we will lose the associated tax revenue. The government has estimated the loss of revenue at about €2 billion.

This has nothing to do with the change in the 12.5% tax rate and would have happened whether or not we agreed to raise that to 15%. There's obviously nothing the Irish government can do to stop the German government taxing profits earned in Germany, if that's what the German government decides to do.

fortwilliam

So, instead of large companies not paying the 12.5% corporate tax...

Now they will not pay the 15% corporate tax.

Easy.

FFVII

https://www.irishtimes.com/business/technology/failure-to-secure-new-intel-plant-a-tragedy-for-state-1.4828466

And the ruination of the state begins.

TBH, we were doing a good job regardless, we are nearly the most indebted country in the world.

€30 billion borrowed for covid - insane. In one month,in Galway, More people were committing suicide than dying from covid during middle of pandemic...im informed by guy helping pull bodies out. Gonna take them 4 years to confirm this.

Already over a billion borrowed for high fuel cost measures... millionaires given free electricity. Excise at pump cut but legally no reason to pass on so most still haven't.

https://www.rte.ie/news/ireland/2022/0316/1286835-derrybrien-wind/

Just look at this.... oooooooh man. 15 grand a day.

4 billion to house, school Ukrainians. The capacity isint there for people here already but we are renting out entire hotels in Kerry for some reason for next 6 months...fuking mental. Tripping over ourselves to do it. Everyone needs to go to sligo hospital, go to level 3 elevator lobby and be presented with trolley after trolley of mostly 80+ year olds fuked out in corridors of the NEW wing as not big enough. No staff.

The journal is very good at pointing out incredible waste going on. Most days.

Treasure Island....for now, but intel is first of many. No reason to come here if can be avoided.

FFVII

https://www.irishtimes.com/business/economy/poland-blocks-eu-agreement-on-15-minimum-corporate-tax-rate-1.4845240

lol

The poles may save Ireland!