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Ireland and corporate tax avoidance

  • 17-05-2013 11:10am
    #1
    jmayo
    Registered Users, Registered Users 2 Posts: 13,186 ✭✭✭✭


    Is anyone around here keeping an eye on UK's Public Accounts Committee (PAC) investigations into Google ?
    Google Inc came under fire from British lawmakers investigating its tax affairs and whether it had misled parliament in testimony last year, adding fuel to a debate on taxation that has risen to the top of the UK political agenda.

    Google's Northern Europe boss, Matt Brittin, was called back to testify to parliament's Public Accounts Committee (PAC) on Thursday after an investigation by the Reuters news agency showed the company employed staff in sales roles in London, even though he had told the committee in November its British staff were not "selling" to UK clients.

    Reuters correspondent Tom Birgin said that his investigation showed that Google employed UK-based sales staff.

    "Google told the public accounts committee in November that it did not have a taxable presence in the UK in respect of its main advertising business, because it did not actually have any sales people here in London. It did not sell from London, it actually conducted all its sales from Ireland," Birgin said.

    "Our investigation showed that the company employed many sales people here, and indeed advertised for jobs for people to conduct high level negotiations to close deals," he said.

    http://www.aljazeera.com/news/europe/2013/05/2013516173832119691.html

    Amazon appears to be next for a grilling.

    Does anyone see problems ahead for Ireland ?

    A lot of other countries are getting more than a bit peeved at this stage.

    And it is really not just our lower corporation tax rate that is brought into focus, but the so called "Double Irish" system whereby corporations just use us (and indeed the Netherlands) as a conduit to the likes of Bermuda to avoid taxes both in high tax countries they gain the revenue and indeed in Ireland.

    I am not allowed discuss …



«13456

Comments

  • #2
    halkar
    Registered Users, Registered Users 2 Posts: 1,271 ✭✭✭halkar


    What they dont tell us is how much Google or Amazon paid in national Insurance, business rates, VAT, PAYE, PRSI, wages, payments to contractors and how much they pay in the economy.

    Corporation tax should be abolished for such a big companies that provide thousands of jobs.


  • #3
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    jmayo wrote: »
    Is anyone around here keeping an eye on UK's Public Accounts Committee (PAC) investigations into Google ?

    It's funny watching them realise that the single market they wanted has consequences that they didn't consider. In this case it's that all sales are done out of Dublin and that the "sales teams" in the UK, France etc are really merely marketing teams that generate leads and hand it off to Dublin for the actual sale.

    They can't change the corporate tax laws without changing the structure of the market, good odds that they'd end up in the ECJ if they did.


  • #4
    jmayo
    Registered Users, Registered Users 2 Posts: 13,186 ✭✭✭✭jmayo


    halkar wrote: »
    What they dont tell us is how much Google or Amazon paid in national Insurance, business rates, VAT, PAYE, PRSI, wages, payments to contractors and how much they pay in the economy.

    Corporation tax should be abolished for such a big companies that provide thousands of jobs.

    But in the grand scheme of things is the amount they cough up in taxes and contribute to the economy through their employment here not shag all in comparison to the amount they save in their corporation taxes ?

    But as an MP said this morning that is fine for Ireland because at least they have the jobs whereas the UK, France, Germany, etc get shag all of out of it except revenue flowing out of their country.
    antoobrien wrote: »
    It's funny watching them realise that the single market they wanted has consequences that they didn't consider. In this case it's that all sales are done out of Dublin and that the "sales teams" in the UK, France etc are really merely marketing teams that generate leads and hand it off to Dublin for the actual sale.

    Isn't that the google line ;)

    BTW it isn't just the single (EU/European) market, because this involves Bermuda where the real savings are made.
    Also Britain, France, etc are struggling and they need revenue, they are beginning to realise just how much they are losing.

    Also one other area that is defintely going to start getting tightened up is the issue of VAT on digital services where such things as music, book and movie downloads are billed as services (under EU VAT law AFAIK) rather than products.

    I am not allowed discuss …



  • #5
    ardmacha
    Registered Users, Registered Users 2 Posts: 7,476 ✭✭✭ardmacha


    But as an MP said this morning that is fine for Ireland because at least they have the jobs whereas the UK, France, Germany, etc get shag all of out of it except revenue flowing out of their country.

    How many jobs are in Britain in Amazon, Sky etc for services delivered in Ireland?

    How many jobs are in Britain for financial services delivered worldwide?


  • #6
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    jmayo wrote: »
    Isn't that the google line ;)

    It isn't just the google line, there are a lot of sales booked through Dublin
    jmayo wrote: »
    BTW it isn't just the single (EU/European) market, because this involves Bermuda where the real savings are made.

    That's a related but different issue. They don't pay the taxes here (either) because the patents are owned by a co. in Bermuda that the have to pay license fees to.....
    jmayo wrote: »
    Also Britain, France, etc are struggling and they need revenue, they are beginning to realise just how much they are losing.

    And we aren't? If google & microsoft had to pay 12.5% CT here it'd pretty much solve our budget deficit.
    jmayo wrote: »
    Also one other area that is defintely going to start getting tightened up is the issue of VAT on digital services where such things as music, book and movie downloads are billed as services (under EU VAT law AFAIK) rather than products.

    That was a major issue with amazon a few years back where companies would not sell to Ireland due to VAT and rules around electronics. It was sorted (don't know how).


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  • #7
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    ardmacha wrote: »
    How many jobs are in Britain in Amazon, Sky etc for services delivered in Ireland?

    How many jobs are in Britain for financial services delivered worldwide?

    It's not about jobs, it's about aggressive tax avoidance.

    Google's pays £6m in UK tax on sales of £3bn. Does that sound fair?


  • #8
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    Fratton Fred wrote: »
    It's not about jobs, it's about aggressive tax avoidance.

    Google's pays £6m in UK tax on sales of £3bn. Does that sound fair?

    Yes because the sales are not British sales they are EU sales made to British customers, as are the sales made to customers in France, Germany, The Netherlands etc.

    So why should they be taxed as British sales, when we are supposedly all in an EU market?

    edit - VAT is paid on sales, corporation tax is paid on profits.


  • #9
    jmayo
    Registered Users, Registered Users 2 Posts: 13,186 ✭✭✭✭jmayo


    antoobrien wrote: »
    It isn't just the google line, there are a lot of sales booked through Dublin

    Ehh it is the google line that they do not sell to UK from within UK.
    Using the line that it is only marketing and no sales are closed is pushing the definition to it's limits.
    Watch out for possibility of whistleblowers appearing claiming otherwise.
    antoobrien wrote: »
    That's a related but different issue. They don't pay the taxes here (either) because the patents are owned by a co. in Bermuda that the have to pay license fees to.....

    I know they don't pay much if any corpo tax here thanks to the Double Irish technique and through the help of moving fuds through The Netherlands.
    I already alluded to that in earlier post.

    BTW is that Bermuda company not registered here, but it's management is based in Bermuda ?
    antoobrien wrote: »
    And we aren't? If google & microsoft had to pay 12.5% CT here it'd pretty much solve our budget deficit.

    But we would probably lose their jobs since they would move to some other low tax, weird double taxation scheme country.
    antoobrien wrote: »
    That was a major issue with amazon a few years back where companies would not sell to Ireland due to VAT and rules around electronics. It was sorted (don't know how).

    Ehhh I thought the Amazon issue was only on electrical goods since WEEE was applied here, but not in the UK ?

    I am not allowed discuss …



  • #10
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    jmayo wrote: »
    Ehh it is the google line that they do not sell to UK from within UK.
    Using the line that it is only marketing and no sales are closed is pushing the definition to it's limits.
    Watch out for possibility of whistleblowers appearing claiming otherwise.

    I work with a multinational that has the same sales practices as google. The UK gov don't really have a leg to stand on because most of the companies doing this use EMEA operations based in Dublin to do the actual sale. Everything else is lead generation not sales.

    jmayo wrote: »
    I know they don't pay much if any corpo tax here thanks to the Double Irish technique and through the help of moving fuds through The Netherlands.
    I already alluded to that in earlier post.

    BTW is that Bermuda company not registered here, but it's management is based in Bermuda ?

    Yeah that's transfer pricing, a separate issue to the UK problem. The UK are whining that the sales made to British customers should be taxed in Britain where the customer resides, not the country that actually books the sale - Ireland.

    The co. in bermuda will own the technology rights or patents or something that requires it to be paid royalties.

    jmayo wrote: »
    But we would probably lose their jobs since they would move to some other low tax, weird double taxation scheme country.

    Possibly. Or they could just do a paddypower on it because it will take years to actually move the sales processing etc to each individual country.

    jmayo wrote: »
    Ehhh I thought the Amazon issue was only on electrical goods since WEEE was applied here, but not in the UK ?

    There was a VAT issue as well for a while. The smaller sellers wouldn't sell to Ireland because the vat rates made it a bit too much hassle.


  • #11
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    antoobrien wrote: »
    Yes because the sales are not British sales they are EU sales made to British customers, as are the sales made to customers in France, Germany, The Netherlands etc.

    So why should they be taxed as British sales, when we are supposedly all in an EU market?

    edit - VAT is paid on sales, corporation tax is paid on profits.

    That is what the committee is trying to ascertain. From the sounds of things, it is more than lead generation, Google are using UK based sales people to close the sale from the sound of things.


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  • #12
    jmayo
    Registered Users, Registered Users 2 Posts: 13,186 ✭✭✭✭jmayo


    antoobrien wrote: »
    I work with a multinational that has the same sales practices as google. The UK gov don't really have a leg to stand on because most of the companies doing this use EMEA operations based in Dublin to do the actual sale. Everything else is lead generation not sales.

    Except the thing is the UK government have now much in common with the French, German, Swedish, Finnish, Italian, etc governments when it comes to losing revenue.
    Hell even many in the US are concerned about their corporations US tax avoidance measures and the fact they are shipping jobs overseas.
    antoobrien wrote: »
    Yeah that's transfer pricing, a separate issue to the UK problem. The UK are whining that the sales made to British customers should be taxed in Britain where the customer resides, not the country that actually books the sale - Ireland.

    I know it is separate, but it has been very much highlighted by these investigations.
    The laugh here is that our corpo tax, as low as it is, is also sidestepped in the process.
    Ireland comes out of it looking like a shady place to channel money through.
    We already know how the IFSC is viewed.
    antoobrien wrote: »
    The co. in bermuda will own the technology rights or patents or something that requires it to be paid royalties.

    That is the way it usually works, one is a holding company and owes money to another.

    The funny thing is companies have been setting up in the likes of Isle of Man, Channel Islands, etc and selling into the UK proper for years.
    Except those companies were usually involved in financial products often not available to the normal consumer and thus did not appear as visible on the radar.

    I am not allowed discuss …



  • #13
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,100 Mod ✭✭✭✭AlmightyCushion


    halkar wrote: »
    Corporation tax should be abolished for such a big companies that provide thousands of jobs.

    I'd disagree with that. Big companies already have a huge advantage over SMEs with regards avoiding corporation tax. I would be open to it being abolished for all companies because then it puts all companies on an even playing field. That small, local coffee shop who can't use creative accounting to move it's profits overseas is better able to compete with the likes of a big company like Starbucks who currently pay very little corporation tax. We'd have the make up the few billion euro it brings in elsewhere though.


  • #14
    Cookie_Monster
    Registered Users, Registered Users 2 Posts: 24,522 ✭✭✭✭Cookie_Monster


    Fratton Fred wrote: »
    Google's pays £6m in UK tax on sales of £3bn. Does that sound fair?

    CT and sales have little to do with each other to be fair. CT is a tax on profits, not sales.


  • #15
    Rightwing
    Closed Accounts Posts: 8,101 ✭✭✭Rightwing


    We need to educate the people and then get very tough on these companies.

    We provide jobs, we can do as we like sort of b/****.


  • #16
    20Cent
    Registered Users Posts: 8,939 ✭✭✭20Cent


    Anyone know if one of these IFSC based postboxes banks goes bust or is found to be laundering money or whatnot is Ireland liable?

    There was a case of a Bank called Depfa which was bought by a German bank just before it imploded. Ireland would have been liable for the losses except the sale had gone through just in time. Dodged a bullet there but could there be more like that?


  • #17
    hmmm
    Registered Users, Registered Users 2 Posts: 11,205 ✭✭✭✭hmmm


    Our low corporation tax is a timebomb that will blow up sometime in the future when other nations become sick of us. We know this yet we continue to build our economic policy around attracting foreign multinationals. It's crazy, but it's typical for us that we take a short term approach.

    Attracting the skills and experience of multinationals is ok, but let's try and use them to build a domestic industry.


  • #18
    AlmightyCushion
    Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,100 Mod ✭✭✭✭AlmightyCushion


    hmmm wrote: »
    Our low corporation tax is a timebomb that will blow up sometime in the future when other nations become sick of us. We know this yet we continue to build our economic policy around attracting foreign multinationals. It's crazy, but it's typical for us that we take a short term approach.

    Attracting the skills and experience of multinationals is ok, but let's try and use them to build a domestic industry.

    How will it blow up on us? The only way I can see it blowing up is if other countries lower theirs to compete with us. I can see the double Irish, Dutch sandwich potentially being gotten rid of. Whether the Dutch fix the loophole from their end or we do.


  • #19
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    Rightwing wrote: »
    We need to educate the people and then get very tough on these companies.

    We provide jobs, we can do as we like sort of b/****.

    That's the least Rightwing thing I've ever seen you post - are you feeling alright?!


  • #20
    hfallada
    Closed Accounts Posts: 4,180 ✭✭✭hfallada


    The reason the EU isnt really putting proper pressure on Ireland to change its corporation tax. Is the a lot of the companies will leave and go to low tax countries like Singapore, Switzerland.

    The US government is starting to put pressure on US firms who use proper tax havens like Bermuda and British Virgin Islands. Where the companies are a tiny office and not a physical presence like in Ireland


  • #21
    Rightwing
    Closed Accounts Posts: 8,101 ✭✭✭Rightwing


    barneystinson wrote: »
    That's the least Rightwing thing I've ever seen you post - are you feeling alright?!

    Contrary to my name, I'm not rightwing at all, some folk may think so just because I think there is massive waste in places like councils etc.


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  • #22
    barneystinson
    Registered Users, Registered Users 2 Posts: 4,685 ✭✭✭barneystinson


    Rightwing wrote: »
    Contrary to my name, I'm not rightwing at all, some folk may think so just because I think there is massive waste in places like councils etc.

    Really - not right wing at all..?! Or maybe you have schizophrenia:
    Rightwing wrote: »
    We need a little shift to the right in this country.
    Rightwing wrote: »
    the facts are , smaller government, smaller services, we should be looking for a lean government with most things privatised.

    So, considering you want small lean government, who exactly is going to
    Rightwing wrote: »
    educate the people and then get very tough on these companies.
    ??


  • #23
    Rightwing
    Closed Accounts Posts: 8,101 ✭✭✭Rightwing


    barneystinson wrote: »
    Really - not right wing at all..?! Or maybe you have schizophrenia:





    So, considering you want small lean government, who exactly is going to
    ??

    I'm probably right wing in this country, but would be considered a lefty in America, that's the scale of the problem we have here. No wonder we're badly bust and in a bailout program.


  • #24
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    Cookie_Monster wrote: »
    CT and sales have little to do with each other to be fair. CT is a tax on profits, not sales.

    I know, but I doubt that Google's profit on a €3bn turnover is a mere €30m.


  • #25
    maninasia
    Registered Users, Registered Users 2 Posts: 4,622 ✭✭✭maninasia


    hfallada wrote: »
    The reason the EU isnt really putting proper pressure on Ireland to change its corporation tax. Is the a lot of the companies will leave and go to low tax countries like Singapore, Switzerland.

    The US government is starting to put pressure on US firms who use proper tax havens like Bermuda and British Virgin Islands. Where the companies are a tiny office and not a physical presence like in Ireland

    The UK is in a bit of a bind because the City of London runs the biggest tax avoidance scam in the world.

    http://www.vanityfair.com/society/2013/04/mysterious-residents-one-hyde-park-london


  • #26
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    Fratton Fred wrote: »
    I know, but I doubt that Google's profit on a €3bn turnover is a mere €30m.

    You'd be surprised how high costs can be. The 2009 accounts have been linked before in an article that shows how much money is pushed through Ireland (will post if I can find it again).


  • #27
    squod
    Closed Accounts Posts: 8,704 ✭✭✭squod


    Mr Van Rompuy said last month that about one trillion euro is lost in EU member states because of tax evasion and tax avoidance each year

    http://www.irishtimes.com/news/politics/tax-avoidance-inching-up-eu-agenda-as-trillion-euro-may-be-slipping-though-net-1.1390646?page=2

    http://www.boards.ie/vbulletin/showpost.php?p=84409433&postcount=69


  • #28
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    jmayo wrote: »
    Except the thing is the UK government have now much in common with the French, German, Swedish, Finnish, Italian, etc governments when it comes to losing revenue.
    Hell even many in the US are concerned about their corporations US tax avoidance measures and the fact they are shipping jobs overseas.

    And they'll be very slow to do anything about it because of the nature of the trade & tax agreements. There are very few global or region-region agreements. There are over 3,000 tax treaties alone, each of which will have to be changed in order for them to get what they want.


  • #29
    Dante
    Registered Users, Registered Users 2 Posts: 1,581 ✭✭✭Dante


    What ever happened to the Common Consolidated Corporate Tax Base bill proposed by the EU a while back to harmonise international tax laws? No doubt if this was introduced, the large majority of MNCs based in Dublin would simply pack up and leave without a second glance once the scope for profit shifting and transfer pricing through Ireland's dubious tax jurisdiction was eliminated. Like hmmm said, its a timebomb waiting to explode.


  • #30
    maninasia
    Registered Users, Registered Users 2 Posts: 4,622 ✭✭✭maninasia


    Fratton Fred wrote: »
    I know, but I doubt that Google's profit on a €3bn turnover is a mere €30m.

    Most of these companies use a system whereby they give the license to their IP and work processes to an entity in Dublin and then their subsidiaries in other European countries pay the 'license fee' (read profits) from their subsidiaries to the licensed office, the license fee is conveniently calculated so they do not have any profits in their subsidiary countries.

    Then they pump the profits through other tax avoidance/reduction schemes (double Irish (Ireland/Netherlands) and often end up sticking it in the Cayman Islands or BVI for safe keeping. Very little goes back to Uncle Sam.

    If you were an individual you'd have a real nice life sitting on the back of these schemes.


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  • #31
    creeper1
    Registered Users, Registered Users 2 Posts: 701 ✭✭✭creeper1


    The fact of the matter is that being tax efficient is not only legal but corporations have a moral duty to their share holders to be exactly minimize tax paid.

    IF I was a share holder I'd be wanting those dividends and I'd be wanting them high. ;)

    I think I remember Sarkozy making negative comments about Ireland's corporate tax rate. The message from boards.ie users to him was a strong "go to hell" That message should be even louder to the Brits trying to interfere.

    Ireland has the right to set low tax on corporations and if anything we should lower it further to piss off the likes of Sarkozy etc.

    I understand that whistleblowers were at the root of the current issue with google (sales allegedly were made in England -something I personally don't believe) If I were google plc I'd be severely reprimanding or even firing such "whistleblowers".


  • #32
    maninasia
    Registered Users, Registered Users 2 Posts: 4,622 ✭✭✭maninasia


    In America they have a legal duty to maximize shareholder return, I don't know how many other countries have such a system in place.

    It's besides the point though, flies will land on **** if you let them :).

    The point is it possible that the current tax system will be changed against Ireland's wishes due to pressure from overseas. I don't see it happening yet although there has been plenty of grumbling. I do see Amazon to start having to include a sales tax pretty soon though.

    More troubling would be other countries taking a leaf out of Ireland's book and offering the same or lower rates. That would negate the advantage also.

    Google cannot reprimand or fire whistleblowers without breaking the law. they wouldn't be so stupid as to openly go down that route. Whistleblowers , if there are taxes recoverable, are also often entitled to a reward.


  • #33
    maninasia
    Registered Users, Registered Users 2 Posts: 4,622 ✭✭✭maninasia


    This is more worrisome, it's coming from the Yanks not the Brits. The Yanks are getting more serious about it as they need the money these days.

    http://www.rte.ie/news/business/2013/0521/451564-apple-tax-arrangements/
    "Since the early 1990s, the government of Ireland has calculated Apple's taxable income in such a way as to produce and effective tax rate in the low single digits,'' the report said. Since 2003 this rate has been 2% or less - in one year, 2011, it was 0.05%.
    The report said its findings "demonstrate Ireland has essentially functioned as a tax haven for Apple, providing it with income tax rates approaching zero".
    It said Apple has cash holdings of $145 billion, of which $102 billion is offshore
    The Senate committee has already published reports into the tax affairs of two other US high tech companies with significant Irish operations - Microsoft and Hewlett Packard.
    Burdened with a government debt of $16 trillion, and a shrinking corporate tax base, the US government is moving to the forefront of a growing group of countries that want to see an overhaul of international tax laws that will cut down the opportunities for companies to avoid paying corporation taxes.
    The issue of international corporation tax reform is likely to form a major part of the discussions at next month's G8 summit in Fermanagh.


  • #34
    edanto
    Registered Users, Registered Users 2 Posts: 2,809 ✭✭✭edanto


    maninasia wrote: »
    The UK is in a bit of a bind because the City of London runs the biggest tax avoidance scam in the world.

    http://www.vanityfair.com/society/2013/04/mysterious-residents-one-hyde-park-london

    That's a fascinating article and any journalist worth their salt should be asking tough questions about the murky legal waters around the City of London, in the context of tax avoidance by MNCs.
    Vanity Fair wrote:
    It comes as a surprise to most people that the most important player in the global offshore system of tax havens is not Switzerland or the Cayman Islands, but Britain, sitting at the center of a web of British-linked tax havens, the last remnants of empire. An inner ring consists of the British Crown Dependencies—Jersey, Guernsey, and the Isle of Man. Farther afield are Britain’s 14 Overseas Territories, half of them tax havens, including such offshore giants as the Caymans, the British Virgin Islands (B.V.I.), and Bermuda. Still further out, numerous British Commonwealth countries and former colonies such as Hong Kong, with deep and old links to London, continue to feed vast financial flows—clean, questionable, and dirty—into the City. The half-in, half-out relationship provides the reassuring British legal bedrock while providing enough distance to let the U.K. say “There is nothing we can do” when scandal hits.

    Data is scarce, but in the second quarter of 2009 the three Crown dependencies alone provided $332.5 billion in net financing to the City of London, much of it from tax-evading foreign money. Matters are so out of hand that in 2001 Britain’s own tax authorities sold off 600 buildings to a company, Mapeley Steps Ltd., registered in the tax haven of Bermuda to avoid tax.

    Britain could close down this tax-haven secrecy overnight if it wanted, but the City of London won’t let it. “We have, to put it provocatively, a second British empire, which is at the very core of global financial markets today,” explains Ronen Palan, professor of international political economy at City University in London. “And Britain is very good at not advertising its position.”

    .......
    .....

    But secrecy, for many, is at least as important: once a foreign investor has avoided British taxes, then offshore secrecy gives him the opportunity to avoid scrutiny from his own country’s tax—or criminal—authorities too. Others use offshore structures for “asset protection”—frequently, to avoid angry creditors. That seems to be the case with a company called Postlake Ltd.—registered on the Isle of Man—which owns a $5.6 million apartment on the fourth floor. Postlake is in turn registered as owned by Purcey Ltd., a B.V.I. entity, which is registered as held on behalf of an Isle of Man trust set up by the bankrupt Irish property developer Ray Grehan, who has been pursued by Ireland’s National Asset Management Agency to recover more than $350 million it says it is owed. Grehan had argued that the apartment is not really his but belongs to a family trust. Martin Kenney, a B.V.I. lawyer, says B.V.I. companies are frequently owned by foreign trusts from more outlandish jurisdictions, such as Nevis or the Cook Islands, deepening the secrecy. These structures are “debtor-friendly and creditor-unfriendly,” he says, so in cases of fraud it can be very hard to recover assets.


  • #35
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    maninasia wrote: »
    In America they have a legal duty to maximize shareholder return

    If that is true then how do some many tech companies not pay a dividend?

    Simple answer is that it is not true that it is a legal requirement, in fact the amount of regulatory requirements (SOX being a big one that many will have hear of) that have been put in place over the past 10 or so years looks geared to ensure not shareholder value but company viability.

    The duty to maximise shareholder return is somewhere between a commercial obligation for US companies as this is how the companies raise funding and often how the employees get paid.


  • #36
    [Deleted User]
    Posts: 5,121 ✭✭✭ [Deleted User]


    antoobrien wrote: »
    If that is true then how do some many tech companies not pay a dividend?

    Simple answer is that it is not true that it is a legal requirement, in fact the amount of regulatory requirements (SOX being a big one that many will have hear of) that have been put in place over the past 10 or so years looks geared to ensure not shareholder value but company viability.

    The duty to maximise shareholder return is somewhere between a commercial obligation for US companies as this is how the companies raise funding and often how the employees get paid.
    Shareholder return would be profits and share value - not just dividends. Dividends are really only a consequence of profits or value.


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  • #37
    20Cent
    Registered Users Posts: 8,939 ✭✭✭20Cent


    There does seem to be a backlash against these tax avoidance measures. People in the UK must be wondering why their spare bedroom is being taxed while massive multinationals pay little or no taxation.
    These freeloaders need to be boycotted until either the tax laws change or they start paying their fair share. Being tax compliant and socially responsible will become the new environmentally friendly.


  • #38
    Cookie_Monster
    Registered Users, Registered Users 2 Posts: 24,522 ✭✭✭✭Cookie_Monster


    maninasia wrote: »
    In America they have a legal duty to maximize shareholder return, I don't know how many other countries have such a system in place.

    There are essentially two schools of thought: the UK / US model where nothing apart from shareholder return matters and the Japanese model where stakeholder return is more importtant (ie consideration for employees, owners, mgt, community, enviroment, gov etc is all equally important.

    most of Europe float somewhere in the middle of these two but Ireland is firmly entrenched in the UK/US end of things.

    The other thing to note is that a dividend is not necessarily good for shareholders, long term shareholder value increase is the key factor which mainly come from increasing the share value rather than simply paying out cash each year. Proper reinvestment and growth is more valuable long term.


  • #39
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    20Cent wrote: »
    There does seem to be a backlash against these tax avoidance measures. People in the UK must be wondering why their spare bedroom is being taxed while massive multinationals pay little or no taxation.
    These freeloaders need to be boycotted until either the tax laws change or they start paying their fair share. Being tax compliant and socially responsible will become the new environmentally friendly.

    That attitude is pretty galling considering the vast majority of those people seem to have no clue that taxes are paid not on revenue but on profit.

    The simple fact of the matter is that these companies are tax complaint and most of them engage in community based schemes that will do more for social responsibility than any amount of tax funnelled into "social transfers"


  • #40
    20Cent
    Registered Users Posts: 8,939 ✭✭✭20Cent


    antoobrien wrote: »
    That attitude is pretty galling considering the vast majority of those people seem to have no clue that taxes are paid not on revenue but on profit.

    The simple fact of the matter is that these companies are tax complaint and most of them engage in community based schemes that will do more for social responsibility than any amount of tax funnelled into "social transfers"

    Profit is manipulated. Starbucks make little or no profit on their shops in the UK. The coffee is bought from a subsidiary in Switzerland which changes the price to ensure this. Thats pretty galling for the people in the UK watching services etc being cut. It must also be galling to those who run their own coffee shops and pay the full taxes on them without the accounting monkey business. People need to take a companies tax arrangements into consideration when making a purchase, which they are beginning to do.

    Tell me about these community schemes that do more than the police, fire services and hospitals then. Token charity public relations payments to pet causes not the same.


  • #41
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    20Cent wrote: »
    Tell me about these community schemes that do more than the police, fire services and hospitals then. Token charity public relations payments to pet causes not the same.

    Community schemes like going into disadvantaged schools and working with children? Cleaning beaches? Helping to repaint nursing homes? You can call it token, but the real tokenism is the grab that money it should be ours attitude.

    Here's something for you to consider, if we were to base the corporation tax on the profit on actual sales made in Ireland we would almost certainly reduce the amount of corporation tax paid here. How does that effect your cuts to Irish services?


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  • #42
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    antoobrien wrote: »
    Community schemes like going into disadvantaged schools and working with children? Cleaning beaches? Helping to repaint nursing homes? You can call it token, but the real tokenism is the grab that money it should be ours attitude.

    Here's something for you to consider, if we were to base the corporation tax on the profit on actual sales made in Ireland we would almost certainly reduce the amount of corporation tax paid here. How does that effect your cuts to Irish services?

    Europe wide closing of these loop holes would mean U2 might again be an Irish company and we could all go back to loving Bono again.


  • #43
    20Cent
    Registered Users Posts: 8,939 ✭✭✭20Cent


    antoobrien wrote: »
    Community schemes like going into disadvantaged schools and working with children? Cleaning beaches? Helping to repaint nursing homes? You can call it token, but the real tokenism is the grab that money it should be ours attitude.

    Here's something for you to consider, if we were to base the corporation tax on the profit on actual sales made in Ireland we would almost certainly reduce the amount of corporation tax paid here. How does that effect your cuts to Irish services?

    Imagine a plumber in Dublin set up an off the shelf company in Switzerland, all his jobs were paid to that company and he gave himself minimum wage in order to pay as little tax as possible, house car etc owned by the offshore co. That loophole would be shut down quick smart.

    Yeah I call the services you describe as tokenism or more like public relations/marketing, bet they get tax relief on them as well. A crack down on tax havens would probably be bad for Ireland though agree, still doesn't mean we have to pimp our country out to them. A Europe wide solution to the issue seems required. Isn't that on the agenda for the G8?


  • #44
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    Fratton Fred wrote: »
    Europe wide closing of these loop holes would mean U2 might again be an Irish company and we could all go back to loving Bono again.

    Meh, never liked him anyway, always thought there was something off about him. The tax stance just gave me a concrete reason. I guess if it ever does happen I'll just have to not like him for having a way overblown ego.


  • #45
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    20Cent wrote: »
    Imagine a plumber in Dublin set up an off the shelf company in Switzerland, all his jobs were paid to that company and he gave himself minimum wage in order to pay as little tax as possible, house car etc owned by the offshore co. That loophole would be shut down quick smart.

    I give you bono.


  • #46
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    20Cent wrote: »
    Yeah I call the services you describe as tokenism or more like public relations/marketing, bet they get tax relief on them as well

    This attitude shows an utter lack of understanding of just how seriously companies take Corporate Social Responsibility. They are far more common than one might believe, the problem is that the projects tackled rarely get any kind of media coverage so they get little or no visibility, unless provided in the form of sponsorship, despite the millions in time put into it by employees of these companies.

    These PR/marketing schemes as you describe them get help where it's actually needed, rather than where a TD/senator/councillor/interest group lobbies for it and cost the taxpayer nothing.


  • #47
    20Cent
    Registered Users Posts: 8,939 ✭✭✭20Cent


    antoobrien wrote: »
    This attitude shows an utter lack of understanding of just how seriously companies take Corporate Social Responsibility. They are far more common than one might believe, the problem is that the projects tackled rarely get any kind of media coverage so they get little or no visibility, unless provided in the form of sponsorship, despite the millions in time put into it by employees of these companies.

    These PR/marketing schemes as you describe them get help where it's actually needed, rather than where a TD/senator/councillor/interest group lobbies for it and cost the taxpayer nothing.

    These companies enjoy all the facilities of their host countries, security, public transport, education etc etc yet avoid contributing to them. I'm just not as impressed by these token pr stunts as yourself.


  • #48
    antoobrien
    Registered Users, Registered Users 2 Posts: 6,106 ✭✭✭antoobrien


    20Cent wrote: »
    These companies enjoy all the facilities of their host countries, security, public transport, education etc etc yet avoid contributing to them. I'm just not as impressed by these token pr stunts as yourself.

    To call their local actions "token PR stunts" is to show a total lack of understanding of what it is these companies do for communities.

    How about asking somebody from Ballinasloe about the effect of AT Cross pulling out (90s)?

    Dell in Limerick(2000s)?

    The proposed job losses at Johnson & Johnson in Cashel?

    Fruit of the Loom from their factories in Donegal (90s)?

    Abbot cutting 180 jobs in Sligo(2012)?

    Jacobs in Tallaght (owned by Danone - 2000s)?

    Celestica in Swords (2000s)?

    Add the income tax of the 250k odd people employed & the jobs they support then you start to see the value of these companies. They owe is nothing but they still support the local communities through sponsorships & initiatives like CSR.


  • #49
    20Cent
    Registered Users Posts: 8,939 ✭✭✭20Cent


    antoobrien wrote: »
    To call their local actions "token PR stunts" is to show a total lack of understanding of what it is these companies do for communities.

    How about asking somebody from Ballinasloe about the effect of AT Cross pulling out (90s)?

    Dell in Limerick(2000s)?

    The proposed job losses at Johnson & Johnson in Cashel?

    Fruit of the Loom from their factories in Donegal (90s)?

    Abbot cutting 180 jobs in Sligo(2012)?

    Jacobs in Tallaght (owned by Danone - 2000s)?

    Celestica in Swords (2000s)?

    Add the income tax of the 250k odd people employed & the jobs they support then you start to see the value of these companies. They owe is nothing but they still support the local communities through sponsorships & initiatives like CSR.

    Threads about corporate tax avoidance that list of companies didn't fold or leave because the tax was too high.

    Any examples of these wonderful initiatives these tax avoiders are doing in Ireland? Some google employees getting sponsored for the marathon doesn't count.

    Britain and the US are getting pretty tired of the loopholes being used via Ireland could be costing us more than the benefit gained from hosting them. There are enquiries ongoing in the UK and the US at the moment looking at this issue.

    When these companies fail to pay their fair share the burden is put onto the citizens increases. Also for the sake of a free market having one company paying little or no tax distorts the market and competition.


  • #50
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    This investigation by the UK is a sham. You don't get corporation tax on sales in your country. You get corporation tax on profits where the company selling is based. Many of these companies have been here since they were tiny startups - Apple has been here since 1980, before the Mac, 27 years before the iPhone. It was a high corporation tax then. If Apple owes the UK tax on sales, then BMW in Germany owes taxes on sales in the UK, not profits to Berlin. ( which is bollocks). Amazing the number of Irish people who are prepared to disregard Irish sovereignty.

    Thats a rubbish claim. Legally and morally, or any other way.

    The investigation in the US has more moral merit, but no legal merit. The Americans are claiming that all moneys earned abroad by American headquartered companies should be repatriated after taxes are paid and immediately. At least there is some merit, as most of the Intellectual Property is created there. However whats sauce for the Goose is sauce for the Gander. American companies based in America but owned abroadshould repatriate their profits abroad, and not re-invest there.

    Ireland should close the Bermuda loophole ( we are actually losing money). Companies won't flee ( to where? We would still be low at 12.5 % - and the workforce is stikcy) But tarts it.

    In reposnse to the UK we should investigate the City.


  • #51
    Duggys Housemate
    Closed Accounts Posts: 3,298 ✭✭✭Duggys Housemate


    20Cent wrote: »
    These companies enjoy all the facilities of their host countries, security, public transport, education etc etc yet avoid contributing to them. I'm just not as impressed by these token pr stunts as yourself.

    Indeed they do so they should pay 12.5% here and tell the UK to jump in a pond.


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