Ireland’s corporate tax boon will soon ‘dry up’, warns former OECD chief

snl rory

https://www.businesspost.ie/news/irelands-corporate-tax-boon-will-soon-dry-up-warns-former-oecd-chief/ - original

https://archive.ph/QsY3x - full archive

Interesting read. Looks like our revenue could dry up pretty fast if we aren't careful. This is without mentioning the housing crisis and other problems with infrastructure and workforce/salary that makes Ireland less completive already.

snl rory

Ireland’s record haul of corporate tax receipts will “dry up” over the coming years, the architect of the landmark OECD tax reforms has warned.

Pascal Saint-Amans, the former director of the OECD’s Centre for Tax Policy who led the negotiations on global tax reform for more than a decade, said countries like Ireland that had pursued low tax strategies to attract multinationals will struggle to win the same level of new foreign investment once the rules take full-effect.

“It’s going to be much more difficult [for countries like Ireland to compete on tax],” Saint-Amans told the Business Post.

Clo-Clo

How many of these types of articles have been fired out in last 30 years?

Guess what, the rest of Europe and the World are not happy Ireland has such a huge installation of companies. So they will release these articles in the hope of causing concern with these companies.

When we had a lot of manufacturing in Ireland and that was moved for lower pay regions we had all of these articles as well. Except we made the transition to more complex jobs etc.

timmyntc

This does not mean an exodus or job losses (except where tax companies have an Irish arm specifically to aid companies routing tax through here).

R&D tax credits are what encourage job growth here moreso than the headline CT rate. We may lose a lot of CT on profits made worldwide but declared here, however the CT from actual Irish MNC activity remains strong. (Pharma, tech with actual Irish operations, employing 1000s)

We compete on a number of issues, not just tax. Sure Luxembourg and Malta all compete on tax, but don't have half the FDI as us, because we actually have the staff and expertise. The jobs are safe, the bumper CT is not.

gossamerfabric

https://www.boards.ie/discussion/comment/121582380#Comment_121582380

So, why didn't that save Ireland from the Troika in 2008? The exact same tax and regulatory arbitrage policies were being followed back then.

timmyntc

https://www.boards.ie/discussion/comment/121582388#Comment_121582388

2008 had nothing to do with FDI competitiveness - it was a GLOBAL financial crisis, keyword being global. Companies weren't going elsewhere for better tax or infrastructure, they just weren't investing full stop because they were in crisis.

2008 has nothing in common with the topic of this thread or CT reform.

gossamerfabric

...and Ireland as an economy didn't have the resilience to withstand. All that debt Ireland is carrying which supposedly never gets paid back has to be serviced and if corporate tax income stagnates or reduces then it can't repay comfortably and interest rates on bonds rise. Income tax isn't paying the costs of running Ireland Inc., Corporation tax is.

RobbieV

He who laughs last?

"PWC warned that Ireland could lose foreign investment to Britain, which has a much more straightforward tax system for multinationals, while the American Chamber said many US companies are now re-examining their global operations as a result of the OECD reforms"

L.Ball

https://www.boards.ie/discussion/2058330063/ireland-s-corporate-tax-boon-will-soon-dry-up-warns-former-oecd-chief

Yeah but the economy is the best in europe so we'll be able to take the hit.

Charles Babbage

The point about harmonised tax arrangements is that there is no particular incentive for a company to leave to go somewhere else. So companies will base their decisions on non tax issues, Ireland now has a critical mass of certain industries and this will ensure that things keep going to a substantial extent. The very rapid growth of the past will not return, but if you have full employment and living standards comparable to other countries then fast growth is hardly likely or even desirable.

gossamerfabric

I would have thought the incentive to up sticks looms whenever the lease on the Office in Dublin is up for renewal every few years or break clause is actionable along with a list of vacancies which can't be filled because of staff turnover due to the high cost of living in Dublin.

In my company an entire department is near retirement age. They will be replaced by workers in another lower cost office overseas and the department will wind down.

Podge_irl

https://www.boards.ie/discussion/comment/121582483#Comment_121582483

I would have thought the incentive to up sticks looms whenever the lease on the Office in Dublin is up for renewal every few years or break clause is actionable along with a list of vacancies which can't be filled because of staff turnover due to the high cost of living in Dublin.

And yet no one is leaving...

Ireland hasn't even had the lowest Corporation Tax rate in Europe for decades.

gossamerfabric

all is going tickety boo until it isn't

Gusser09

Hmmmm

The dogs on the street and their owners can see 2008 coming all over again. Its on the horizon. I think things will be very different this time though. Homes will be reposessed. Unlike 2008 to 2015 there is now a queue of people who will buy these homes and get the loans to do so.

Interesting times ahead but we are due a huge bang.

Clo-Clo

https://www.boards.ie/discussion/comment/121582426#Comment_121582426

The UK is not part of the European Union anymore and that means more red tape for American companies. Especially when they want to use as a base for Europe. You try telling every person coming for day/week trip to the HQ that they need a visa and see how far it goes.

Even people based in the HQ flying to a European office would need a visa as they are not a European anymore

Clo-Clo

https://www.boards.ie/discussion/comment/121584006#Comment_121584006

Some people are foaming at the mouth in anticipation of a downturn for Ireland. Normally you would expect this is from other countries in Europe but mostly I see it from people in Ireland.

Strange to think you seem excited at the prospect of of people been homeless.

Gusser09

https://www.boards.ie/discussion/comment/121584054#Comment_121584054

No. Not at all. Its very different this time. Only the wealthy can afford home ownerehip in ireland at the moment. Any downturn this time will only impact the upper class.

People on 50 -70k might actually benefit from the arse falling out of the market.

I havent benefited form the "recovery" after 2008. Neither have a lot of my friends.

Podge_irl

https://www.boards.ie/discussion/comment/121584076#Comment_121584076

Any downturn this time will only impact the upper class.

To all intents and purposes this is never true.

Gusser09

https://www.boards.ie/discussion/comment/121584135#Comment_121584135

Not this time.

RobbieV

https://www.boards.ie/discussion/comment/121584045#Comment_121584045

? Not according to pwc. Easier to do business. That's why London is still the capital of finance

BlueSkyDreams

https://www.boards.ie/discussion/comment/121584076#Comment_121584076

Over 70% of adults in Ireland own their own home. Mortgaged or outright.

Things are tough for renters, sure. But they are the minority.

Thats not a point to belittle anyone, just a point of context.

Gusser09

https://www.boards.ie/discussion/comment/121584260#Comment_121584260

The 70% is shrinking year on year. Rapdily.

Clo-Clo

https://www.boards.ie/discussion/comment/121584228#Comment_121584228

So how many companies have moved to UK since brexit?

Clo-Clo

https://www.boards.ie/discussion/comment/121584076#Comment_121584076

Thays nonsense, the home ownership rate is marginally up in Ireland and The majority of houses are been bought by people to live in. So the “only the wealthy” is boll**ks

If you haven’t benefitted well you should invest some money in a financial advisor

RobbieV

https://www.boards.ie/discussion/comment/121584285#Comment_121584285

What does that have to do with your comment? Or mine

Gusser09

https://www.boards.ie/discussion/comment/121584291#Comment_121584291

Record numbers homeless mate.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121584269#Comment_121584269

its actually not. it was the highest in 2022 since 2010.

It was higher in the 90s, around 80%. But the low of 60% is being reversed

Emblematic

https://www.boards.ie/discussion/comment/121584054#Comment_121584054

@Clo-Clo wrote: "Strange to think you seem excited at the prospect of of people been homeless."

I think however unbalanced economic growth can lead to homelessness.

Charles Babbage

https://www.boards.ie/discussion/comment/121584269#Comment_121584269

It went up from 68.7% in 2019 to 70.4% in 2022.

orangerhyme

https://www.boards.ie/discussion/comment/121584076#Comment_121584076

Plenty of houses under 400,000 in Dublin.

It's difficult for a single person but not impossible for a couple.

Deub

I am worried for Ireland. The governments in the last decade seem to throw money at every problem. Just over half of people renting get rent supplement. How is it a healthy market?

The biggest issue I see coming is, the decrease of tax on profit made in other countries AND the housing crisis. The housing situation in Ireland doesn’t make it attractive for companies to come here.

Jizique

https://www.boards.ie/discussion/comment/121584299#Comment_121584299

Have you seen the level of immigration mate

This country would be in some state if MNCs upped sticks for whatever reason. It certainly is getting more difficult to make Ireland an attractive place to do business. We have some challenges for sure.

Furze99

https://www.boards.ie/discussion/comment/121581802#Comment_121581802

Hmm and you don't think others can do more complex jobs?

You either need to have ideas, concepts, intellectual property or manufacturing/ growing things.

Being somewhere in the middle between those is not a good place.

Clo-Clo

https://www.boards.ie/discussion/comment/121584516#Comment_121584516

Did I say others couldn't?

Ireland could never compete anymore in manufacturing and the transition from manufacturing has already been done which was crucial. We should be proud of the ability of the country to achieve it

https://www.boards.ie/discussion/comment/121584414#Comment_121584414

Every country in the World would be in "some state" if the large companies based in them shut down. Ireland is no different.

I was listening to this nonsense in secondary school business. And that was quite a while ago.

Furze99

https://www.boards.ie/discussion/comment/121584691#Comment_121584691

You didn't but since you observed that low paid manufacturing had moved away, it's also the case that more 'complex' jobs may move away.

The point is we really are at nothing - we largely live off the enterprise of others. We should either be making goods of high value that others want to purchase or developing ideas and ownership of new technology.

Wanderer78

https://www.boards.ie/discussion/2058330063/ireland-s-corporate-tax-boon-will-soon-dry-up-warns-former-oecd-chief

...id love to know how corporation revenues are gonna cease to exist!

...we ll be fine lads, relax, amounts will probably fluctuate, and in some cases, by a lot, but dry up, seriously!

...plough on lads, crack on with resolving our most serious issues!

ELM327

https://www.boards.ie/discussion/comment/121584299#Comment_121584299

The homeless industry will persist regardless. Plenty of NGO CEOs and lobbyists and interest groups depend on it. Home ownership in Ireland is rising, not falling. We rose a percentage point in the last 3 years and are now above 70%.

https://www.boards.ie/discussion/comment/121584076#Comment_121584076

This is quite frankly nonsense. Are 71% of the country "wealthy"? I bought my first house as a single person in 2018 on less than 50k. I bought our current house and sold my own, last year, as part of a couple. We arent wealthy by any means, just a standard couple with jobs. If you haven't benefitted from the recovery then you're doing something wrong.

Wanderer78

https://www.boards.ie/discussion/comment/121586076#Comment_121586076

...yup, the fire sectors are well in control of our property markets, hence why more than likely will remain in this current state of fcukedness, go lobbyists!

depends how you define wealthy, but since wealth is generally stored in the value of assets such as property, the quick answer is yes and no, if you own your house outright, you maybe classed as wealthy, if you re up to your t1ts in it, more than likely not, but you have a claim on the ownership of, providing full debt repayment of course...

...again, we actually dont all have the same opportunities in life, we dont actually live on that planet, and as wealth inequality grows, as we have now, so to does the equality of opportunity, i.e. it becomes harder for those that dont own assets, i.e. access and ownership of wealth, i.e. exactly what we have happening now in many, if not most advanced economies, including, and in particular here...

...so get ready, the establishment is over, in ireland, thats ffg, the electorate, in particular those negatively effected from the above, are going elsewhere....

Furze99

https://www.boards.ie/discussion/comment/121586076#Comment_121586076

Could you purchase now in 2023 as a single person on less than €50K gross??

There has been a steepish rise in property, rents and general cost of living over the 5 years since. Not matched for most by pay increases.

ELM327

https://www.boards.ie/discussion/comment/121586279#Comment_121586279

I could indeed purchase the same property. It went from 120k when I bought it, to 160k when I sold it, to about the same now looking at markets for the same estate. (It's in westmeath, about 45mins commute to my job which was then based in D15. I was on 40k then). Purchasing it I would only need 10% deposit and then the rent is so much more expensive than the mortgage. My mortgage was about 400 quid a month when the properties near me were being rented for 1k+

Fred Cryton

https://www.boards.ie/discussion/2058330063/ireland-s-corporate-tax-boon-will-soon-dry-up-warns-former-oecd-chief

I think at least some of that is wishful thinking and petty jealousy from socialist countries on the continent like France and Italy, who have never liked our lower tax rate and wish us nothing but harm. I'd say its more likely the number of new multinationals coming to Ireland will slow down as theres less reason to move here, but the likes of Apple, google, Pfizer are going nowhere and they account for bulk of the tax.

We would still have lower corporate tax rates than almost anywhere else, and offer a far more business friendly environment.

But we need to be careful the UK doesn't steal new multinationals with incentives now they outside the EU. And start building way more PRIVATE housing, rather than our obsession with social housing and "de homeless".

ELM327

https://www.boards.ie/discussion/comment/121586381#Comment_121586381

The UK being outside the EU is a hindrance to them as they are not an english speaking market in the EU. There would be trade external to the EU and all the problems that brings.

Charles Babbage

https://www.boards.ie/discussion/comment/121585972#Comment_121585972

We are making goods of high value that others want to purchase, we make microprocessors, we make hip implants and replacement knees, we make drugs of all sorts, we have Irish companies making things like customised forklifts.

Fred Cryton

https://www.boards.ie/discussion/comment/121586475#Comment_121586475

I wouldn't be as confident about that, especially if the UK gets some equivalent recognition and more alignment with EU regulations over time. Ireland hosts EMEA HQ, that's Europe, Middle east and Africa. So its not just EU. An EMEA HQ does not necessarily need to be in the EU.

Frank Bullitt

https://www.boards.ie/discussion/comment/121584006#Comment_121584006

This is like the boards.ie go to post for the past 3 years. "Yup, any day now the economy will go pop...just you wait...just watch...any minute".

The desire for a potential crash is equally confusing.

Randycove

https://www.boards.ie/discussion/comment/121584045#Comment_121584045

short term business trips between the EU and the UK don't require a visa, that is just plain wrong.

tinytobe

https://www.boards.ie/discussion/comment/121582483#Comment_121582483

That's sadly the main reason for leaving an employment in Dublin, the high cost of renting. The problem to the story is that people taking a job with the multinationals in Dublin can mostly easily find good paying jobs in other EU cities where renting is easier.