Is a minimum international level of corporation tax a threat to Ireland?

NIMAN wrote: »

If we all have the same CT, I honestly can't see the huge MNCs upping and leaving Dublin to head to Poland, Slovakie or Croatia.

Maybe you disagree, but can't see it.

I would assume locating in Germany or the Netherlands would be expensive too, just like Dublin, so I can't see any benefit of making the move?

German cost of living is lower, better infrastructure, Healthcare, miserable shower but so are most Americans

[Deleted User] wrote: »

I don’t think we can get out of this. The EU will probably take it up.

I have read the possibility of a mandatory minimum tax from the commission.

The Irish people were promised in the last referendum that this would never happen.

If they try that route I would like to see the part of any treaty that states the EU has any right to set taxes in any country or a tax base.

I suspect there is going to be another attempted encroachment by stealth on our sovereignty this time in relation to corporate taxation which the Irish people were told couldn't happen, that we had protocols and assurances. Remember that?

fash wrote: »

Netherlands? Germany? Portugal? Croatia?

All have far better weather, 3 have beaches, all have better infrastructure; all have better accommodation situations; fairly easy to get around in each in English too.

Government have been putting all their eggs in the MNC basket for decades now, blowing about how many of the top companies were headquartered here and at the same time neglecting indigenous industries,

NIMAN wrote: »

But how much do Facebook, Google, Twitter etc care about the weather? Or beaches?

I appreciate we have iffy infrastructure and issues with getting people housed or places to rent, but it has had no effect on these MNCs locating here so far, why would they suddenly decide that Irelands infrastructure or housing situation is now an issue simply cos they are being taxed slightly more?

Dell jumped ship for a few million in Polish grants , Fruit of the Loom pulled out for a few cents an hour and took millions worth of equipment paid for by Irish state with them,

If Dublin is to be attractive with these changes we seriously need to up our game.

For example, one of the biggest issues I have with Dublin is the mediocrity and conservatism of the place.

The idea that you can't build more than six floors for example and treating the place like some Florence style museum piece has to go. It's anything but. We need proper transport systems and we need greater emphasise on our public realms.

These attitudes cost us homes and jobs and need to change.

It's the same for all cities/towns were multinationals may locate.

We need more ambition to attract quality jobs here. It has to be somewhere people both want to and can live in.

We also need to support indigenous industries.

Dublin right now is not an attractive enough proposition. We have seen in recent days the coming to the surface of the anti social issues that have been building for years as well.

There needs to be focus on so many things that have been ignored too long because all of these things are basic quality of life issues that will swing the dial one way or another when it comes to investment.

America has screwed Ireland over with this policy.

tjhook wrote: »

Apologies, I don't know as much about this topic as many others do. But I gather the two main measures are (1) minimum corporate tax rate and (2) corporate taxes being paid where sales are made rather than where the company is based.

It seems the second item above is the bigger threat to Ireland. But does it partly work in our favour? I.e. sales of foreign goods in Ireland will mean corporate taxes being diverted to Ireland from whatever country their company HQ is based?

The most obvious example is cars - we don't make any in Ireland. Will Volkswagen etc have to start paying corporate tax in Ireland rather than Germany for cars sold here?

VW distributors Ireland would already be paying that tax, Car makers sell through agents Google doesnt

There seems to be a notion that all the staff in MNCs are on huge money, this isn't the case, a lot would be on very average to low incomes,

Kermit.de.frog wrote: »

It's a highly likely loss of jobs as well.

While some investments already committed will remain because it's not worth the agro moving the real damage will be in jobs not coming here.

It has to be repeated why would they?

With these changes there is no reason for US companies any longer to have key operations outside of the United States.

This applies to everywhere, not just Ireland.

It may or it may not. Some would argue that we are now growing and developing our own tech industries a lot faster. It's not easy to up sticks and some of them have been here years. It's also a whole lot more than just having operations in the US and there are massive advantages to being in a country where they can service one of largest trade blocks in the world.

fash wrote: »

Currently? In California.
Once tax becomes equalized? Could well be Lisbon, Malaga, Barcelona, Trieste etc.

If you assume it is all about tax. There are many other other benefits here. We really have generated a critical mass in many industries now , IT and tech, pharma, finance.

FreshCoffee wrote: »

So for example if Apple (based in Ireland) makes profits on sales to Germany, today Apple pays corporate tax to Ireland on the profits from those sales and those taxes are returned to the Irish Exchequer. In the future we will hand over those corporate taxes to the German Exchequer (at the German corporate tax rate). We will only keep the corporate tax on Apple profits from their sales within Ireland which for these large companies is tiny compared to their overall sales.

Surprised this hasn't been picked up on yet.

**The following take is a simplistic view. Pub talk alert so some details may be inaccurate**

Your example I think I is false. Let me explain roughly what I mean.

In short, Ireland chooses not to Tax profits made from other EU countries basically. We ignore them. So we already do what you suggested will become the norm.

So an iPhone sold in Germany via ADI(Apple distribution International) has its revenue and profits booked through the Irish company. Under EU law, to prevent double taxation, all profits from all of Apples European sales are booked under ADI. However, ADI owes licensing agreements back to ASI (Apple Sales international) so the revenue might be 200billion for Europe, but the profit is 10million since the iPhone was on licence from ASI. For example, ADI buys the rights of ASI for the iPhone at a rate of 500dollars per phone, and sells the phone for 501 dollars meaning the maximum potential profit per iPhone sold in EU is 1 dollar.( clever eh?)

So ADI makes a profit of 10million, and 12.5% of 10 million is 2.5million. Done.

It's that mad.

Other Notable points:
12.5% tax is applied in FULL on all Irish profits from Apple from IRISH sales only. This is how the Irish government is playing its cards with the EU commission. It's true, Ireland does not give preferential treatment to Apple. It taxes Apple 12.5% of Irish profits.

ASI is not tax resident in Ireland, so Ireland does not tax it. ASI is in Bermuda via a holding company in the Netherlands.
This is where the mad 0.02% comes up when officially we are taxing Apple 12.5%.

Source: In a previous life I worked in a partnership firm that helps with such matters and had this explained to me in the pub many times by the souls working in the deep end

Chacha97 wrote: »

I am a bit conscious of intel. They seem to be falling behind quite a bit in the semi conductor race. AMD seems to be flying it, nvidia doing OK but intel seems to be lagging a bit.

I read a while ago a decent size investor in them was lobbying to outsource their chip manufacturing!

People also tend to overlook that Ireland is in a continuous tug of war with Israel over new Intel investments in their fab facilities. Safe to say looks like one bow is going from our arrow.

The other concern is you could have longer term wind downs and exits. In other words they keep what they have but let operations naturally diminish through no new significant investments. A kinder way possibly but same result.

I struggle to see, given the many problems the country has, our infrastructure deficits and quality of life issues how we are going to compete if forced to on a level playing field with well run and better cities in Europe on a like for like basis.

Chacha97 wrote: »

I am a bit conscious of intel. They seem to be falling behind quite a bit in the semi conductor race. AMD seems to be flying it, nvidia doing OK but intel seems to be lagging a bit.

I read a while ago a decent size investor in them was lobbying to outsource their chip manufacturing!

People talk about Intel as if it were still 2004-05. They have fallen behind in a big way to their rivals.

The talk of Tax Harmony can't be good from our point of view.

2.2 Billion could be optimistic from Paschal given how many other of our services are linked to the MNCs. We could lose out signigicantly for years and years if it comes to pass.

FWIW I reckon the MNC's will still find a way of avoiding tax. We could be looking at reports of it happening elsewhere whilst we have a mass exodus of work and a vicious return of emigration.

ancapailldorcha wrote: »

https://www.bbc.co.uk/news/politics

I think it's fantastic that some progress has been achieved. These companies have, in my opinion, been dodging their fair share of tax for far too long now. The covid-19 pandemic only threatens to worsen inequality so hopefully, raising more money from these corporations will yield long term benefits.

I'm hoping that Ireland signs up to this agreement as well. Ireland's corporation tax rate is not far below the 15% rate at 12.5%. I don't think there's likely to be any damage to Ireland should it sign up as the country is a well established base of services, high quality agriculture and manufacturing in both engineering and pharmaceuticals. I think the country has much more to offer than simply a mere tax haven.

From the article:



Hopefully, this will offset or help to mitigate some of the financial damage caused by the pandemic and lead to a new source of sustainable income for governments.

I think it won't make a jot of a difference, as it is most multi nationals paying nowhere near the current rate as it is. Pascal's kite flying regarding loosing €2 billion in yearly corporation tax is just farcical. If he spent as much time chasing the tax actually owed than he does kite flying the state coffers would look a lot healthier. Kind of Ironic this news comes on the same week news broke Microsoft paid little or no tax on 100"s of Billions in profit.