EU looking at Corporation Tax

Mick Regan · 08-09-2010 11:04PM #1

I remember a lot of discussion here during Lisbon 2 that EU tax harmonisation would not be forced on Ireland. Is this still the case....?

Scofflaw · 09-09-2010 12:11AM

Mick Regan wrote: »

I remember a lot of discussion here during Lisbon 2 that EU tax harmonisation would not be forced on Ireland. Is this still the case....?

Just as it was during Lisbon, the answer is "depends...". It depends on whether you mean harmonising the rate of tax, or the basis of calculation of tax - specifically, in both cases, corporation tax.

The rate of tax is not within the competence of the EU to set. The Commission is, however, continuing to move forward with the idea of harmonising the basis of calculation of corporation tax.

Is this in response to the IT article about CCCTB? It's not really accurate, though:

Irish Times wrote:

The plan was first aired in 2001. Agreement proved elusive and it was withdrawn in mid-2008 in the wake of Ireland’s rejection of the Lisbon Treaty. Now, however, the commission believes the conditions are ripe for its reintroduction.

The plan was not at any point "withdrawn" - it has continued all along to be an aim of the Commission, because it evens things up within the common market, which is the job of the Commission. As to whether it will garner the necessary support this time - that's an open question. We're not the only low corporate tax EU member (we're not even the lowest), and we're certainly not the only beneficiary of the current rather lumpy playing field, so we're not likely to be alone in wishing to oppose it - which means that it's unlikely to go forward, because it only takes one country to veto it:

Irish Times wrote:

Changes to European tax policy must be unanimously endorsed by member states before they take effect so the Government could veto the plan.

Nor is it really a terribly good candidate for "enhanced cooperation", given that it's quite a fundamental change, and contentious. However, there is no way of preventing any number of other states from agreeing a common basis for calculation of corporation tax among themselves - we could agree a common basis with the UK, or the US, or Yemen, if we wanted to.

What does remain definitively the case is that Lisbon did not change the picture with respect to such a proposal, apart from raising the number of members needed for enhanced cooperation to nine rather than eight.

cordially,
Scofflaw

liammur · 09-09-2010 10:23AM

http://www.rte.ie/aertel/131-01.html

Low corporation tax has advantages and disadvantages, but MNC's aren't paying enough tax imo and therefore there is a greater burden on the taxpayer. A standardised rate of maybe 20% to 25% is to be welcomed.

ei.sdraob · 09-09-2010 10:35AM

liammur wrote: »

Low corporation tax has advantages and disadvantages, but MNC's aren't paying enough tax imo and therefore there is a greater burden on the taxpayer. A standardised rate of maybe 20% to 25% is to be welcomed.

You welcome the only sector in the country actually generating real wealth and employing hundreds of thousands of people packing its bags and leaving?

heres some maths for you
12.5% of something is better than 25% of nothing

low (not the lowest in EU mind you) corpo tax is the only thing going for this country

SkepticOne · 09-09-2010 10:42AM

"A commission spokesman said this did not necessarily mean that corporation tax rates would change. "

This means that corporation tax rates will change.

liammur · 09-09-2010 10:42AM

ei.sdraob wrote: »

You welcome the only sector in the country actually generating real wealth and employing hundreds of thousands of people packing its bags and leaving?

heres some maths for you
12.5% of something is better than 25% of nothing

low (not the lowest in EU mind you) corpo tax is the only thing going for this country

Your argument simply smacks of panic.

Banned Account · 09-09-2010 10:46AM

Another one of these threads in AH.

This relates to the calculation of a common tax base - not the rate of corporation tax which cannot be legislated for by the EU without the express consent of every country.

Please can we try and understand the issues before jumping to conclusions, it makes discussion difficult otherwise.

ei.sdraob · 09-09-2010 10:47AM

liammur wrote: »

Your argument simply smacks of panic.

Erm of all the bad decisions that this country has made lately
raising the corporation rate could be the dumbest one!

Its the only good thing left about doing business in this country

anyways corporation rax is charged on profits, not many companies are making much of that lately...

So in short term it would not raise much

in the medium term it would lead to companies leaving and/or closing down

in the long term it will mean even more unemployment as no one bothers to setup shop here

Welease · 09-09-2010 10:48AM

liammur wrote: »

Your argument simply smacks of panic.

http://www.choosetocompete.org/pdf/Barrett_Testimony_060622.pdf

Count Dooku · 09-09-2010 10:49AM

http://yestoeurope.ie/

Nino Brown · 09-09-2010 10:53AM

liammur wrote: »

Your argument simply smacks of panic.

Far from it actually, Craig Barrett, former CEO of Intel recently said that when Intel originally moved to Ireland they had 9 reasons, now there is only 1 reason left, our tax rate. We used to have low construction costs, low labour costs and low power costs etc, now all we have going for us is our low tax rate.

If we give that up we're in huge trouble. I wouldn't worry about it though, there's no way our government would agree to a corporate tax rate change.

johnnyjb · 09-09-2010 10:57AM

Fitzcaraldo wrote: »

Another one of these threads in AH.

This relates to the calculation of a common tax base - not the rate of corporation tax which cannot be legislated for by the EU without the express consent of every country.

Please can we try and understand the issues before jumping to conclusions, it makes discussion difficult otherwise.

Another "Another one of these threads in AH" in AH

liammur · 09-09-2010 11:22AM

ei.sdraob wrote: »

Erm of all the bad decisions that this country has made lately
raising the corporation rate could be the dumbest one!

Its the only good thing left about doing business in this country

anyways corporation rax is charged on profits, not many companies are making much of that lately...

So in short term it would not raise much

Plenty are, likes of Ryanair, Tullow oil.
We focus far too much on foreign MNC's. Why on earth would Intel leave Ireland for another EU country if the same corporation tax applied?

ei.sdraob · 09-09-2010 11:26AM

liammur wrote: »

Plenty are, likes of Ryanair, Tullow oil.
We focus far too much on foreign MNC's. Why on earth would Intel leave Ireland for another EU country if the same corporation tax applied?

if we had same tax rate as other EU countries

then we wouldn't have an advantage now would we?

so companies will start considering other factors such as competitiveness, cheap energy etc etc at which we suck

liammur · 09-09-2010 11:28AM

ei.sdraob wrote: »

if we had same tax rate as other EU countries

then we wouldn't have an advantage now would we?

so companies will start considering other factors such as competitiveness, cheap energy etc etc at which we suck

Yes, we have to up our gameplan in these areas, simple as that.

High costs + low tax rates = end in tears.

mickoneill30 · 09-09-2010 11:31AM

liammur wrote: »

Plenty are, likes of Ryanair, Tullow oil.
We focus far too much on foreign MNC's. Why on earth would Intel leave Ireland for another EU country if the same corporation tax applied?

Why on earth would they stay if the same coporate tax applied across all of Europe? Can they get cheaper labour & services anywhere else?

Nino Brown · 09-09-2010 11:33AM

liammur wrote: »

Plenty are, likes of Ryanair, Tullow oil.
We focus far too much on foreign MNC's. Why on earth would Intel leave Ireland for another EU country if the same corporation tax applied?

Cheaper labour, cheaper energy, lower construction costs, cheaper shipping, it's easier to source raw materials when you're not on an island.....etc etc, Why did Dell leave?

Count Dooku · 09-09-2010 11:35AM

liammur wrote: »

We focus far too much on foreign MNC's. Why on earth would Intel leave Ireland for another EU country if the same corporation tax applied?

To get access to cheap workforce
Why Intel shareholders must pay for greed of PS unions and FF populism?

mickoneill30 · 09-09-2010 11:35AM

liammur wrote: »

Yes, we have to up our gameplan in these areas, simple as that.

High costs + low tax rates = end in tears.

So rather than attempt to lower costs we should increase taxes?

liammur · 09-09-2010 11:35AM

mickoneill30 wrote: »

Why on earth would they stay if the same coporate tax applied across all of Europe? Can they get cheaper labour & services anywhere else?

If they can, we need pay cuts and reduce these energy costs etc.

Our tax base needs to be broadened, and by that I mean companies have to play their part. Taxpayers are being bled dry.

ei.sdraob · 09-09-2010 11:36AM

liammur wrote: »

Yes, we have to up our gameplan in these areas, simple as that.

High costs + low tax rates = end in tears.

Ah so your solution is

High costs + high taxes :rolleyes:

excellent lets ignore the elephant in the room of high costs and now ask why are they high and try do something about that

mickoneill30 · 09-09-2010 11:36AM

Count Dooku wrote: »

To get access to cheap workforce
Why Intel shareholders must pay for greed of PS unions and FF populism?

I don't understand that? Are you saying Intel employees are exploited?

Nino Brown · 09-09-2010 11:38AM

liammur wrote: »

If they can, we need pay cuts and reduce these energy costs etc.

Our tax base needs to be broadened, and by that I mean companies have to play their part. Taxpayers are being bled dry.

Are we really? I know it's popular these days to complain about taxes and governments, but I don't really have any problem with our tax burden, there's a lot of people much worse off than us in europe, taxwise.

Tora Bora · 09-09-2010 11:40AM

liammur wrote: »

Plenty are, likes of Ryanair, Tullow oil.
We focus far too much on foreign MNC's. Why on earth would Intel leave Ireland for another EU country if the same corporation tax applied?

It's really, really difficult how any sane, rational, semi-intelligent person could argue for a corporation tax increase in this country right now, or possibly for ever for that matter.
Economically speaking we have had our two legs, one arm, and a couple of fingers of the second hand severely damaged in the collapse. The few fully functioning fingers which we are using to feed ourselves, are foreign multinationals, farming / food exports, some tourism, .............. there aint a whole lot left in this place.
And you want to increase TAX on the MNC finger ............ get real here!

Cut the corp tax on the MNC's. Get more of them in here. Get the ones here to expand. Get the min wage down. Large blue chip companies, never, ever had so much cash on their balance sheets. They are looking out for opportunities to invest in better plants, facilities, means and methods to better future ROI. That is the card the government needs to play right now.
Good place to do business. Low tax. Falling labour costs. People available to man the factory floors.

liammur · 09-09-2010 11:41AM

Nino Brown wrote: »

Are we really? I know it's popular these days to complain about taxes and governments, but I don't really have any problem with our tax burden, there's a lot of people much worse off than us in europe, taxwise.

Right now, we are not. But look down the line, in a few years time when water charges, property taxes come in, income tax goes up we will be bled dry.

SkepticOne · 09-09-2010 11:42AM

Tora Bora wrote: »

Cut the corp tax on the MNC's. Get more of them in here. Get the ones here to expand. Get the min wage down. Large blue chip companies, never, ever had so much cash on their balance sheets. They are looking out for opportunities to invest in better plants, facilities, means and methods to better future ROI. That is the card the government needs to play right now.
Good place to do business. Low tax. Falling labour costs. People available to man the factory floors.

That may put us into conflict with the core EU from whom we may be looking for bailouts later.

ei.sdraob · 09-09-2010 11:45AM

SkepticOne wrote: »

That may put us into conflict with the core EU from whom we may be looking for bailouts later.

True, but our politicians could maybe try to bluff em

"Either allow us to gain competitiveness via only method we have or prepare to handover your valets"
yes i know is cheeky but what options do we have left

liammur · 09-09-2010 11:48AM

Tora Bora wrote: »

It's really, really difficult how any sane, rational, semi-intelligent person could argue for a corporation tax increase in this country right now, or possibly for ever for that matter.
Economically speaking we have had our two legs, one arm, and a couple of fingers of the second hand severely damaged in the collapse. The few fully functioning fingers which we are using to feed ourselves, are foreign multinationals, farming / food exports, some tourism, .............. there aint a whole lot left in this place.
And you want to increase TAX on the MNC finger ............ get real here!

Cut the corp tax on the MNC's. Get more of them in here. Get the ones here to expand. Get the min wage down. Large blue chip companies, never, ever had so much cash on their balance sheets. They are looking out for opportunities to invest in better plants, facilities, means and methods to better future ROI. That is the card the government needs to play right now.
Good place to do business. Low tax. Falling labour costs. People available to man the factory floors.

People need to think it through. What if every country decides to cut the corp tax to 1% ?

Nino Brown · 09-09-2010 11:56AM

liammur wrote: »

People need to think it through. What if every country decides to cut the corp tax to 1% ?

That wont happen, some countries are actually fighting this because they want to keep their corp taxes high, some countries are dependant on that revenue.

Welease · 09-09-2010 12:00PM

liammur wrote: »

Plenty are, likes of Ryanair, Tullow oil.
We focus far too much on foreign MNC's. Why on earth would Intel leave Ireland for another EU country if the same corporation tax applied?

Because, they have cheaper labour, rates, electricity, closer to markets etc etc etc etc...

The only cost we are lower on is Corp tax..

Tora Bora · 09-09-2010 12:01PM

liammur wrote: »

People need to think it through. What if every country decides to cut the corp tax to 1% ?

For example France:D Imagine the street protests, as they increase the pension age at the same time.

It's a hell of a lot longer way from 35% corp tax in some of the big european economies, than it is from ours to 1%.
It's simply impossible for many / most /all of the big economies to do this. Their whole social system is funded by corp tax.
Remember as well, that wheat the mobile MNC's need as well as low tax, is English speaking and available workers. We have both, as well as corp tax advantage.

EU looking at Corporation Tax

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