# Should Ireland agree to the 15% Multinational Corporation Tax Rate?



## Brendan Burgess (15 Jul 2021)

First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World. 

It would be good for the citizens of the World if that came to pass. 

If so, then Ireland should not stand in the way of implementing that. 

Imagine if you had different income tax rates in the different counties in Ireland.  And Kerry brought in a maximum income tax rate of 10% as long as you owned a house there.  We would all shift our income to Kerry. 

Brendan


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## jpd (15 Jul 2021)

Of course we should - no point in sitting or standing in the face of a rising tide -ask Canute


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## 24601 (15 Jul 2021)

Brendan Burgess said:


> First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.
> 
> It would be good for the citizens of the World if that came to pass.
> 
> ...



Why should it be 15% and not, say, 25%? Or 10% for that matter? Countries should be free to chose their own tax policy. If we want a 12.5% corporate tax rate for our own reasons then we should be free to set it at that level. Corporation tax policy has been transformative for the Irish economy. It's a tool that small states can leverage to their advantage and I don't think the likes of the US should be dictating to us what our tax policy should be. 

In relation to the tax haven of Kerry, plenty of people already move their tax residence to lower tax jurisdictions - should there be a uniform personal income tax rate globally too?


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## Steven Barrett (15 Jul 2021)

Brendan Burgess said:


> First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.
> 
> It would be good for the citizens of the World if that came to pass.
> 
> ...


Lots of people moving from California to Texas, where there is no state income tax. Elon Musk being one of them. 

I do not agree that there should be a flat global corporation tax rate, as 24601 says, it allows smaller countries attract business where they would struggle otherwise. What I am against is large corporations paying nothing despite making billions in profit each year.


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## NoRegretsCoyote (15 Jul 2021)

60 years ago Ford made cars in America and had American shareholders. Citroen made cars in France and had French shareholders, etc, etc.

In that world it didn't really matter to Ford what the tax rate in France was, and vice versa.


But in today's world you have firms who make, design, and sell all over the world....with shareholders all over the world too.

The old "sovereign right to tax as we see fit" is very difficult to defend given that there is so much globalistion and so much scope to move profits to where they will be taxed the lowest.


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## Itchy (15 Jul 2021)

Brendan Burgess said:


> First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.
> 
> It would be good for the citizens of the World if that came to pass.
> 
> If so, then Ireland should not stand in the way of implementing that.



Hard to say that is what is being implemented, though. Its composed of various 'carve outs' and ultimately removes a competitive tool in the arsenal of smaller states without corresponding protections. Whats right and whats happening are two different things.


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## joe sod (15 Jul 2021)

NoRegretsCoyote said:


> The old "sovereign right to tax as we see fit" is very difficult to defend given that there is so much globalistion and so much scope to move profits to where they will be taxed the lowest.


Yes that has been true since the 90s with the break up of the Soviet union and the resulting globalisation but it looks like that era is ending. The US and EU are now on the same hymn sheet they want more taxes from those global multinationals. The global pandemic and the anti China rhetoric has actually increased since trump left. Globalisation is actually moving backwards now , when carbon taxes really kick in in the next few years this will have a big impact.


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## Nermal (15 Jul 2021)

Brendan Burgess said:


> First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.
> 
> It would be good for the *citizens of the World* if that came to pass.
> 
> ...



There are no citizens of the world.

We already tax dividends and capital gains. How many bites of the cherry does the State need?


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## Protocol (15 Jul 2021)

Brendan Burgess said:


> First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.
> 
> It would be good for the citizens of the World if that came to pass.



Mostly, they pay more than 15% already.


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## Protocol (15 Jul 2021)

Here is data for 2020:


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## Protocol (15 Jul 2021)

Here is ten year's data.

*Source for all tables is Seamus Coffey, UCC.*


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## Prosper (15 Jul 2021)

We shouldn't agree to it until we know what the US Congress allows their government to do regarding corporate tax.


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## MrEarl (16 Jul 2021)

I don't think we should agree to increasing our Corporation Tax Rate - we're a small county that needs a competitive edge, and the 12.5% rate is it.


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## letitroll (16 Jul 2021)

The right strategy is to wait to see whether the US can follow through legislatively on its OECD commitments.............defending our rate now ensures that in a scenario where Biden fails to get Congress onside and effectively the 15% global minimum rate is dead on arrival.....Ireland can credibility communicate to investors that our rate, even in the face of global pressure, is a commitment we hold sacrosanct. The Netherlands & Luxemburg whom we compete with for particularly tax driven investments will not be able to say the same thing then. It's to Ireland advantage in this scenario.

If Congress approves the tax changes........Ireland will fall in line days later & nobody will remember or care we were with the St.Vincent & Grenadines for a while........we'll jack up the rate to 15 as why let tax leakage occur between our rate and the new soon to be implemented global minimum rate of 15%......the 2.5% spread may go some of the way to recouping the corporate tax lost due to BEPS Pillar 1 but alas wont be enough as Google/Facebook/Microsoft start sending big fat cheques to Macron & Merkel


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## joe sod (16 Jul 2021)

MrEarl said:


> I don't think we should agree to increasing our Corporation Tax Rate - we're a small county that needs a competitive edge, and the 12.5% rate is it.


We are also one of the richest countries in Europe by income, we are no longer the poor 1980s economy. We can't really defend this on moral grounds, we can't really defend it period we will just have to accept what we are told to do by Joe Biden or Ursula.


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## Purple (16 Jul 2021)

I'd far rather see a discussion around minimum effective tax rates. The headline rate in France is 28% but the effective rate for top companies is under 10% and lower than Ireland. We have a very simple Corporation tax system where the effective rate is very close to the headline rate so a 15% rate here could be seriously disadvantageous.
Should big multinationals pay more tax? Yes, of course they should.
Should billionaires pay more tax? Yes, of course they should but that could only take the form of a wealth tax rather than an income tax.
We may be shooting at the wrong target.


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## joe sod (16 Jul 2021)

Purple said:


> We may be shooting at the wrong target.


But Ireland doesn't get to decide what the target is, we have successfully dodged the bullet for more than a decade now. The government doesn't seem to be taking seriously that this is in the firing line, they are going to ramp up spending on housing and "green infrastructure" despite the glaring hole in the finances. Are we heading for another 2008 financial crash where spending becomes unsustainable when revenue suddenly falls. The bigger issue is that countries want to take tax from where the product is sold therefore France and Germany will be taking their share of the pie now


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## Purple (16 Jul 2021)

joe sod said:


> But Ireland doesn't get to decide what the target is, we have successfully dodged the bullet for more than a decade now.


No it doesn't and I didn't suggest otherwise but I certainly think we should be starting the conversation at an OECD level, if only to deflect the spotlight away from us.


joe sod said:


> The government doesn't seem to be taking seriously that this is in the firing line, they are going to ramp up spending on housing and "green infrastructure" despite the glaring hole in the finances. Are we heading for another 2008 financial crash where spending becomes unsustainable when revenue suddenly falls.


Possibly, maybe probably. Fear of the populist left is driving the government to do stupid things and an economically illiterate populace is being fed emotive populist nonsense by a heavily unionised left wing media. The rubbish about the causes of the housing crisis being the best case in point. 



joe sod said:


> The bigger issue is that countries want to take tax from where the product is sold therefore France and Germany will be taking their share of the pie now


Yes, but that's what we said we want and our defence in the EU/Ireland Apple tax case.


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## camlin90 (18 Jul 2021)

The State is a service provider, like every other company. What would happen if the world's mobile phone providers came together and agreed a global minimum monthly charge of 150 euro?

Personal income over 35k is taxed at 48.5 per cent. That's obscene - there is no incentive for a person to work hard, no attempt to help individuals struggling with the rising cost of living and housing. Will they do anything about this as a result of this Corp Tax change? No... It will simply go towards pet projects, like the "covering your rear end" ultra risk averse approach to Covid over the past 18 months. We need to know where this money is going...


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## MrEarl (18 Jul 2021)

joe sod said:


> We are also one of the richest countries in Europe by income, we are no longer the poor 1980s economy. We can't really defend this on moral grounds, we can't really defend it period we will just have to accept what we are told to do by Joe Biden or Ursula.


We need to think about the future,  not just the present, and the past.

We are a country with very limited natural resources, we cannot compete on price given higher overheards (ultimately due to the cost of living), and incur higher costs to inport / export goods and services, due to being an island.

Ireland has a veto, when it comes to the EU agreeing to things like tax harmonisation, and we should use it,  even if it does upset a few of our bigger European partners. It won't be a surprise to them, anyway, given we will just be maintaining our clear long term position on Corporation Tax.


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## joe sod (18 Jul 2021)

MrEarl said:


> Ireland has a veto, when it comes to the EU agreeing to things like tax harmonisation, and we should use it, even if it does upset a few of our bigger European partners. It won't be a surprise to them, anyway, given we will just be maintaining our clear long term position on Corporation Tax.


I think that would be a really stupid thing to do, you can really only legitimately use your veto once therefore it must be of crucial national importance. Are you suggesting we use this veto to maintain a very low corporation tax which ultimately benefits the richest technology companies on the planet. The optics of that would be terrible.

You say we have no natural resources but we have one very valuable natural resource that we have given away , fishing . We were laughing at the Brits for making such a big deal out of fishing . Surely if we were to use a veto on anything it should have been on fish, yes it is a small part of our economy now but that is precisely because we have handicapped it. We would be on much stronger grounds morally to fight for our rights on this .


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## kinnjohn (18 Jul 2021)

MrEarl said:


> We need to think about the future,  not just the present, and the past.
> 
> We are a country with very limited natural resources, we cannot compete on price given higher overheards (ultimately due to the cost of living), and incur higher costs to inport / export goods and services, due to being an island.
> 
> Ireland has a veto, when it comes to the EU agreeing to things like tax harmonisation, and we should use it,  even if it does upset a few of our bigger European partners. It won't be a surprise to them, anyway, given we will just be maintaining our clear long term position on Corporation Tax.


Why should the EU care, seeing we let the cost of living get out of control, we are an Island if we mess up it's our own fault,
We have been rewarding ourselves with loopholes in corporation tax for years,

The Government closes  tax loopholes all the time I never see anyone shed a tear for the people who benefited when they existed,


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## joe sod (18 Jul 2021)

I can see why the government is worried about the international taxation question, its bigger than just the corporation tax issue. Ireland's biggest trading partner by a long shot is the US, we do more trade with the US than even the whole EU as a block marginally based on 2019 statistics. Not even Brexit britain does that much trade with the US, they do  more trade with the EU27 than the US.. Only Switzerland in Europe shares that honour of doing more trade with the US. We all know Switzerlands long history of being a financial tax haven



			https://twitter.com/Lucian_Cernat/status/1416688925515603983/photo/1


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## Purple (19 Jul 2021)

joe sod said:


> You say we have no natural resources but we have one very valuable natural resource that we have given away , fishing . We were laughing at the Brits for making such a big deal out of fishing . Surely if we were to use a veto on anything it should have been on fish, yes it is a small part of our economy now but that is precisely because we have handicapped it. We would be on much stronger grounds morally to fight for our rights on this .


Our fishing industry was only ever accessing less than a quarter of the potential catch. There's no way we were ever going to put in the infrastructure to fix that. This is like (but nowhere near as stupid) as the argument that we gave away billions worth of oil and gas.

Access to the EU is about trade and we've done remarkably well out of that. We have a large sector of highly efficient and capital intensive multinationals. They are the engine of our economy and we need to look after then. Farming as a sector is like a massive FAS scheme where totally unsustainable businesses are kept alive with huge subsidies. Agriculture has been on the Covid Payment for the last 48 years.


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## kinnjohn (19 Jul 2021)

Purple said:


> Our fishing industry was only ever accessing less than a quarter of the potential catch. There's no way we were ever going to put in the infrastructure to fix that. This is like (but nowhere near as stupid) as the argument that we gave away billions worth of oil and gas.
> 
> Access to the EU is about trade and we've done remarkably well out of that. We have a large sector of highly efficient and capital intensive multinationals. They are the engine of our economy and we need to look after then. Farming as a sector is like a massive FAS scheme where totally unsustainable businesses are kept alive with huge subsidies. Agriculture has been on the Covid Payment for the last 48 years.


I agree
What makes you think we in Ireland  can look after the highly efficient and capital intensive multinationals
sectors and at the same time give huge subsidies to sectors with huge lobby groups with an ear in every party likely to form a government after the reform of corporation taxation Worldwide,

I expect the multinational sectors will slowly drift away as the main parties trip over themselves
looking after old lobby groups with close links to all the main parties including SF,


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## VonHohenzollern (19 Jul 2021)

We should wait. If the US congress passes it then we can change citing matching the EU and US figures. The principle that only the government of Ireland changes Irish tax rate needs to be maintained. If we come out and agree to the principle of 15%, our European colleagues will twist us into doing it no matter what occurs at the OECD. Ireland is not a large country that can indirectly subsidise corporations, we arent on the continent to be plugged into the supply chain. We have to user blunter instruments to attract and maintain MNCs. 

We can weather the tide of MNCs investment going out. Only if it is managed and replaced with the growth of homegrown industries; partially financed by Irish capital so the dividends is spent in the local economy. The MNCs have been beneficial in establishing/enriching the Irish middle class, we must now use their wealth and their ingenuity to spur local growth. 

The corporation tax rate helps on this front also.


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## MrEarl (19 Jul 2021)

Anyone who thinks that we'll retain the various MNCs, not to mention attract more, if we increase the Corporation Tax Rate to 15%, is nuts.

We simply cannot compete, so will lose out to lower cost economies. MNCs prioritise their shareholders ahead of all else, so won't pay unnecessarily high overheads.


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## kinnjohn (19 Jul 2021)

Many MNCs Paid their employees a premium to get the best people around in their outpost locations
the real reason they were in these outpost locations was high Corporation tax in their home country or the country's they sell their products in,

There will be new pressure on the MNCs to locate back to where they sell most of their products
Once it is legal to pay corporation tax where the product is sold,
We have seen with Covid how important it is for MNCs to manufacturing in the big powerful countries from now on,
Or should I say the Big powerful countries taking in more Corporation tax can incentives MNCs to locate to their countries leaving outposts locations for good,


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## Nermal (19 Jul 2021)

joe sod said:


> I think that would be a really stupid thing to do, _*you can really only legitimately use your veto once*_ therefore it must be of crucial national importance. Are you suggesting we use this veto to maintain a very low corporation tax which ultimately benefits the richest technology companies on the planet.



Says who?


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## Sophrosyne (20 Jul 2021)

kinnjohn said:


> There will be new pressure on the MNCs to locate back *to where they sell most of their products*


Do you mean where they manufacture the product?


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## Purple (20 Jul 2021)

Sophrosyne said:


> Do you mean where they manufacture the product?


That's where it gets complicated. Most of Apple's products are manufactured in China but the manufacturing cost is probably less than 20% of the retail price. Apple have around 20% of the global smartphone market but around 80% of the profits. 
Where is the value added?
Where are the Apps developed?
How much does branding and advertising add to the overall price and profit?
On the back of the iPhone it used to say "Designed in California and assembled in China".
How much of the supply chain is in China? Where are those companies from and where do they pay their taxes?

And that's just Apple.
Pharma companies are even more complex. The first pill costs $3 billion, the second one costs a cent. Where was the IP developed? We know where it resides but where should it reside? 

Look at these whales closely and they are actually shoals of tiny fish in the shape of a whale.


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## Sophrosyne (20 Jul 2021)

This gives an idea of Apple’s complex manufacturing processes.


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## joe sod (20 Jul 2021)

Purple said:


> And that's just Apple.
> Pharma companies are even more complex. The first pill costs $3 billion, the second one costs a cent. Where was the IP developed? We know where it resides but where should it reside?


thats where Ireland got the biggest benefit, the ability of the tech companies to move the IP to Ireland. Everyone knows most of the IP was developed in California even after all the globalization the brains of the tech companies still reside predominately in California. The tech companies know that there is no threat that a competitor will emerge in Ireland that is why they are so comfortable moving it here. However they are very wary of the Chinese stealing their IP .


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## Merowig (3 Aug 2021)

I find it amusing that people state Ireland should veto it or not agree to raise its cooperation tax. This is quite irrelevant afaik what Ireland does as the US idea is that in case country x is not raising the tax the US will just present a higher tax bill to companies for the delta. And Ireland can't veto a US law - doesn't matter how many bowls of shamrock are sent over for Paddies day...

It is a fact that companies are funneling profits from the US and Central Europe to Ireland, Luxemburg, Caribbean Islands etc.  The US just "stops" that by increasing the tax bill for companies doing that kind of funneling via tax havens like Ireland. Nothing Ireland can really do about that. In the end companies will lose the incentive to funnel profits as it is taxed anyway at source or the tax havens have increased their cooperate tax and they need to compete differently for companies.


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## Sophrosyne (3 Aug 2021)

Merowig said:


> This is quite irrelevant afaik what Ireland does as the US idea is that in case country x is not raising the tax the US will just present a higher tax bill to companies for the delta. And Ireland can't veto a US law - doesn't matter how many bowls of shamrock are sent over for Paddies day...


I agree with this in a way.

Ireland's corporation tax is what it is for all companies, multinational or otherwise.

If the US has difficulty in taxing its own companies then it needs to look at its own corporation tax regime and the terms of its own tax treaties rather than manipulating a global tax rate for every other country.


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## Merowig (3 Aug 2021)

If the US charges the company on the delta between X and 12.5% for countries funneling profits through Ireland it basically removes the incentive of Irelands lower tax rate for Multinationals.
It looks like the days of attracting and keeping Multinationals with low tax rates alone are counted.


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## WolfeTone (4 Aug 2021)

How about an international agreement that puts 0% tax on corporations? 

That way this circus can come to an end and the legal and accounting industry that sustains it and benefits from it will be nullified, partially at least. 
Corporations are after all nothing but bits of paper given legal standing. 
Instead, the people who own the company and the people who work in the company are the entities that avail of the public services that the taxes pay for. 
Labour is already taxed heavily in this country, after €35,000, so profits made on sale of shares could match those tax rates? 
Capital appreciation could be taxed. 
To prevent hoarding and increase fluidity of the stock, greater participation of the population, defuse the pension 'time-bomb', and critically overall financial independence.


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## Peanuts20 (5 Aug 2021)

There is a fundamental difference between the MNC's who have set up manufacturing or support services here and those who are routing their sales through an entity that is simply a name on the door. Facebook etc are not going to pull out of the Silicon Dock because suddenly their corporate tax rate is going to jump to 15%. Most of what Facebook pays in Corporate Tax in Ireland at 12.5% has sod all to do with what their staff does in Dublin. Instead, it is clever Tax avoidance. 

What will happen is that the MNC's will instead try to find a different way to avoid paying Corporate Tax and potentially may route some of their figures through another country with a lower rate. Then we as a country lose out.


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## NoRegretsCoyote (5 Aug 2021)

Peanuts20 said:


> Most of what Facebook pays in Corporate Tax in Ireland at 12.5% has sod all to do with what their staff does in Dublin.


I think you'll find a pretty substantive link between the activity taxable in Ireland and the work of the Irish-based staff.

If there wasn't the IRS would be pretty interested.


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## joe sod (6 Aug 2021)

Peanuts20 said:


> Facebook etc are not going to pull out of the Silicon Dock because suddenly their corporate tax rate is going to jump to 1


"Silicon Dock" is a stupid name anyway, there is absolutely no silicon on those docks, the only silicon is in Intel in leixlip probably the only significant technology manufacturer in the country. A truer name would be "The global IP export and taxation dock"


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## Purple (14 Aug 2021)

WolfeTone said:


> How about an international agreement that puts 0% tax on corporations?
> 
> That way this circus can come to an end and the legal and accounting industry that sustains it and benefits from it will be nullified, partially at least.
> Corporations are after all nothing but bits of paper given legal standing.
> ...


I think I kind of like that idea. I’m not sure though. Someone clever will have to think it through and explain the consequences to me.


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## kinnjohn (14 Aug 2021)

Purple said:


> I think I kind of like that idea. I’m not sure though. Someone clever will have to think it through and explain the consequences to me.


I suspect you would notice it in your pay packet, who do you think will get caught for the shortfall in corporation tax,


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## Purple (16 Aug 2021)

Merowig said:


> I find it amusing that people state Ireland should veto it or not agree to raise its cooperation tax. This is quite irrelevant afaik what Ireland does as the US idea is that in case country x is not raising the tax the US will just present a higher tax bill to companies for the delta. And Ireland can't veto a US law - doesn't matter how many bowls of shamrock are sent over for Paddies day...
> 
> It is a fact that companies are funneling profits from the US and Central Europe to Ireland, Luxemburg, Caribbean Islands etc.  The US just "stops" that by increasing the tax bill for companies doing that kind of funneling via tax havens like Ireland. Nothing Ireland can really do about that. In the end companies will lose the incentive to funnel profits as it is taxed anyway at source or the tax havens have increased their cooperate tax and they need to compete differently for companies.


The current corporation tax system we have is simple. We shouldn't underestimate how valuable that is. Corporate taxation in the US is extremely complicated, as is interacting with the county, state and federal government when running a business of any size. 

The issue of IP is also interesting. If we want to protect our ability to be a credible location for IP registration then we need to invest serious amounts of money into our 3rd level institutions and encourage them to continue to prostitute themselves to MNC's. We are currently doing it right, just not on a big enough scale.


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## Duke of Marmalade (1 Sep 2021)

Purple said:


> I think I kind of like that idea. I’m not sure though. Someone clever will have to think it through and explain the consequences to me.


I agree it is an interesting capitalist idea coming from an unusual source   Corporate taxes are after all, on a look through basis, taxes on the shareholders of the company.  So adjust tax on dividends and capital gains to compensate.  The scope for shenanigans greatly reduced.  Like you @PurpleI look to others to expose the flaw.


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## Sophrosyne (5 Oct 2021)

Phrase 'at least' removed from draft OECD tax deal.

“The phrase has been cited by the Government as the main impediment to Ireland signing the proposed deal.

Its removal now opens the way for Ireland to sign up to the Framework Agreement, which is expected to be finalised on Friday.”

“Ireland is keen to have safeguards in place to prevent the country being compelled to increase the rates to either 18% or 21% in the years [a]head.”

“There is some confidence that any increase in the corporate tax rate would not apply to companies with a turnover of less than €750m.

This would allow the country to keep the 12.5% rates for many firms here and it would be viewed as being particularly advantageous to indigenous companies.

 The OECD plan is not, however, complete.”


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## Purple (5 Oct 2021)

Sophrosyne said:


> Phrase 'at least' removed from draft OECD tax deal.
> 
> “The phrase has been cited by the Government as the main impediment to Ireland signing the proposed deal.
> 
> ...


That'll also influence M&A activity globally.
There'll be a whole new industry to hide the links between companies. What happens when company A owns 49% of 10 other companies, all turning over €700m?


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## Sophrosyne (5 Oct 2021)

Purple said:


> That'll also influence M&A activity globally.
> There'll be a whole new industry to hide the links between companies. What happens when company A owns 49% of 10 other companies, all turning over €700m?


In fairness, that among numerous other issues has always been a problem with a global taxation plan.


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## WolfeTone (7 Oct 2021)

I'm not really getting all the drama about this 15% CT rate for Ireland and the prospect of losing €2bn a year.
At a very basic level if you increase the tax take from 12.5% to 15% it should mean that more money is captured by the Revenue, not less.

Of course the argument is that investors will start to look elsewhere, but where? Everywhere has a minimum of 15% and only if they are applying that rate. 
If investors are looking elsewhere it won't be because Ireland has a minimum CT rate of 15%.

As for losing competitiveness to other countries, what was stopping any other country around the globe from applying rates less than 12.5% until now?
Somewhere like Hungary has a 9% rate, I don't recall any discussion about being undercut by them?

There are a lot more factors for investors other than the CT rate and if Ireland is applying the minimum rate accordingly I cannot imagine much negative effects from this arrangement. Instead it will probably be a good thing for Ireland overall.


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## Delboy (7 Oct 2021)

WolfeTone said:


> I'm not really getting all the drama about this 15% CT rate for Ireland and the prospect of losing €2bn a year.
> At a very basic level if you increase the tax take from 12.5% to 15% it should mean that more money is captured by the Revenue, not less.


There's also an element to the deal whereby Multinationals would pay their taxes i.e. in the country in which the sales were made. That's the bit that hurts us and most of the media analysis and commentary seems to have missed


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## WolfeTone (7 Oct 2021)

Delboy said:


> There's also an element to the deal whereby Multinationals would pay their taxes i.e. in the country in which the sales were made. That's the bit that hurts us and most of the media analysis and commentary seems to have missed



True, but if the CT is what is attracting them to book their sales here then isn't there a prospect that in order to continue to avail of a competitive rate they may move operations here also?

Take US CT rate of 21%. A large multi national sets up a head office in Dublin to avail of CT rate of 12.5% while business operations are in say, Utah.

Under this new global deal the head office in Dublin no longer holds value and instead is shutdown. CT rates of 21% are now applied in the US.
Alternatively, why not keep the Dublin office open and move operations from Utah to Dublin to continue to avail of the more attractive 15% CT rate?

I appreciate this is a very simplistic basis but from purely the perspective of CT rates, 15% is still more attractive than 21%.


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## RetirementPlan (8 Oct 2021)

WolfeTone said:


> I'm not really getting all the drama about this 15% CT rate for Ireland and the prospect of losing €2bn a year.
> At a very basic level if you increase the tax take from 12.5% to 15% it should mean that more money is captured by the Revenue, not less.
> 
> Of course the argument is that investors will start to look elsewhere, but where? Everywhere has a minimum of 15% and only if they are applying that rate.
> ...


One big factor in Ireland's favour, from personal experience with a hi tech multinational, is the two hour overlap in working hours with companies on the west coast USA, which is most of the tech world. 4pm - 6pm in Dublin is 8am - 10am in Seattle and San Fran, and that overlap is essential for collaboration and shared projects. On IT projects, it worked out really well to be handing over bugs at the end of the day Irish time, and coming in next morning to find they have been resolved overnight. Any further east in Europe makes it very difficult for ongoing collaboration on work, without absolutely destroying work life balance.


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## Purple (8 Oct 2021)

The fact is that I just don't understand how companies are taxed in other countries, particularly in the US, so I don't understand how this will actually impact on us.


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## Sophrosyne (8 Oct 2021)

This is a summary from Deloitte of the key features of the Inclusive Framework agreement and the Irish perspective.

I think we are probably several years away from implementation.


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## Protocol (8 Oct 2021)

Purple said:


> The fact is that I just don't understand how companies are taxed in other countries, particularly in the US, so I don't understand how this will actually impact on us.



Yes, it is very complex.

Seamus Coffey from UCC knows a lot, he has a blog, and sometimes contributes to www.irisheconomy.ie






						Economic Incentives
					

Shining a small light on economic reality.




					economic-incentives.blogspot.com
				












						The Irish Economy
					

Commentary, information, and intelligent discourse about the Irish economy



					www.irisheconomy.ie


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## Protocol (8 Oct 2021)

WolfeTone said:


> True, but if the CT is what is attracting them to book their sales here then isn't there a prospect that in order to continue to avail of a competitive rate they may move operations here also?
> 
> Take US CT rate of 21%. A large multi national sets up a head office in Dublin to avail of CT rate of 12.5% while business operations are in say, Utah.
> 
> ...



US firms must pay CT on worldwide profits.

Any profits of US MNC taxed at 12.5% here are subsequently subject to US CT.

But there are loads of exemptions in the US tax code.

You have to read all of Seamus Coffey's stuff to get a handle on it.


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## WolfeTone (8 Oct 2021)

Protocol said:


> Any profits of US MNC taxed at 12.5% here are subsequently subject to US CT





Protocol said:


> You have to read all of Seamus Coffey's stuff to get a handle on it.



Admittedly it is beyond my understanding. Paying 12.5% CT in Ireland _and_ paying CT in the US on top of that. 

There is obviously a lot more to it but more overall sense is that this 15% minimum rate will have little impact on Ireland, if anything we may benefit from it instead.


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## Purple (8 Oct 2021)

WolfeTone said:


> There is obviously a lot more to it but more overall sense is that this 15% minimum rate will have little impact on Ireland, if anything we may benefit from it instead


The 15% is not the issue. This is all about where corporations are taxed. 
There's no scenario in which we are better off at the end of this.


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## Firefly (8 Oct 2021)

I think we're going to find out how really "world class" our education system really is....


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## joe sod (8 Oct 2021)

RetirementPlan said:


> On IT projects, it worked out really well to be handing over bugs at the end of the day Irish time, and coming in next morning to find they have been resolved overnight.


Judging by this it looks like the US guys were resolving alot of the bugs if you were handing it over to them the whole time, this shows the brains of the US multinationals by and large still reside in the US.


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## tomdublin (12 Oct 2021)

MrEarl said:


> we're a small county that needs a competitive edge,


Ireland's likely problems with attracting businesses after corporation tax reform aren't really due to the fact that it's small or somewhat geographically isolated.  The main problem is that important aspects of public life are substandard which in turn depresses Ireland's attractiveness especially for foreign workers. That includes mediocre education and health systems, poor public transport, filthy streets, lack of public amenities and exorbitant rents that make it increasingly difficult for companies to attract and retain highly qualified foreign workers who have lots of countries to choose from.


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## tomdublin (12 Oct 2021)

There is also a difference between Ireland and many other places that used low corporation tax as an economic development strategy (e.g. Hong Kong, Estonia, Singapore, Netherlands, Luxembourg, some Swiss cantons and Israel).  They treated the resulting inflow of corporate investment a bit like an oil boom (lucrative but inevitably temporary) and used the proceeds to build up a world class infrastructure that would keep them economically attractive after corporation tax reform.   By contrast, in Ireland successive governments were betting on Ireland's corporate tax regime going on forever while squandering much of the proceeds, leaving the country in a much more serious long term position than many politicians are willing to admit.


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## Purple (12 Oct 2021)

tomdublin said:


> There is also a difference between Ireland and many other places that used low corporation tax as an economic development strategy (e.g. Hong Kong, Estonia, Singapore, Netherlands, Luxembourg, some Swiss cantons and Israel).  They treated the resulting inflow of corporate investment a bit like an oil boom (lucrative but inevitably temporary) and used the proceeds to build up a world class infrastructure that would keep them economically attractive after corporation tax reform.   By contrast, in Ireland successive governments were betting on Ireland's corporate tax regime going on forever while squandering much of the proceeds, leaving the country in a much more serious long term position than many politicians are willing to admit.


We haven't really reformed how the State is run since the Brits left. That's why we need to blow our windfall taxes on current expenditure.


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## RetirementPlan (12 Oct 2021)

joe sod said:


> Judging by this it looks like the US guys were resolving alot of the bugs if you were handing it over to them the whole time, this shows the brains of the US multinationals by and large still reside in the US.


The US guys and gals were resolving all of the bugs in this particular case, but I wouldn't draw too many conclusions about the whole model from one project for one person. There were also dev teams in Ireland and India, but I just happened to deal mostly with the US teams.


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## Protocol (12 Oct 2021)

WolfeTone said:


> Admittedly it is beyond my understanding. Paying 12.5% CT in Ireland _and_ paying CT in the US on top of that.
> 
> There is obviously a lot more to it but more overall sense is that this 15% minimum rate will have little impact on Ireland, if anything we may benefit from it instead.



The firm would get a credit in the USA for any CT paid abroad.


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## Brendan Burgess (16 Oct 2021)

Noam Chomsky does not agree with our tax policy









						Noam Chomsky: ‘Ireland has robbed poor working people of tens of trillions of dollars’
					

The 92-year-old author on US foreign policy and Ireland’s immoral tax regime




					www.irishtimes.com
				




_You’ve had some strong words about the Irish taxation system, particularly as it applies to offshore companies. You described Ireland as a tax haven. What do you think we should do about that?

“Cancel it. Ireland, for its own benefit, has robbed poor working people around the world of tens of trillions of dollars. Huge quantities. Take the world’s first trillion-dollar corporation, its headquarters are in Ireland, [which] means it doesn’t have to pay US taxes. One of many gimmicks by which the very rich can rob from the poor. Ireland wants to be part of that? Your choice. I certainly don’t approve of it.”_


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## odyssey06 (16 Oct 2021)

Not sure what Chomskys point is.
The US was richer than Ireland when we introduced our lower tax rate. So werent we the poor robbing the rich?
If they were taxed in the US how would the poor be any less robbed?
And arent the extra profits taxed for dividends when they are ultimately repatriated...

I think Chomsky should stick to his area of expertise in languages.


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## noproblem (16 Oct 2021)

I think that as Chomsky gets nearer to meeting his maker he's attempting to make himself out to be a bit of a do-gooder. He now hopes to be remembered as one of the good guys, a bit of a Robin Hood. I'd pay as much heed to him as I would to a dying wasp. Neither have any further use and he knows it too. Hense, the attempted "shting"


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## NoRegretsCoyote (16 Oct 2021)

Brendan Burgess said:


> Ireland, for its own benefit, has robbed poor working people around the world of tens of trillions of dollars


Ireland's cumulative GDP (even inflation adjusted) since the beginning of time has not been tens of trillions of dollars.

Ireland's corporation tax take will be $16bn or so this year. It's a lot of money, but nowhere near the sums he's talking about.


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## Purple (17 Oct 2021)

Brendan Burgess said:


> Noam Chomsky does not agree with our tax policy
> 
> 
> 
> ...


The hubris of the Yanks, who think the solution to their stupid taxation system is for other countries to change their systems. 
Apple etc pay exactly as much tax in the USA as the American Government and Congress wants them to pay.


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## Sophrosyne (17 Oct 2021)

Purple said:


> The hubris of the Yanks, who think the solution to their stupid taxation system is for other countries to change their systems.


That's exactly it.

The US has been pushing this labelling of Ireland and other countries as "tax havens", which lazy journalism has followed enthusiastically.

It needs to look at its own taxation system which favours globalization & profit shifting to the detriment of its non-global domestic companies.


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## Protocol (17 Oct 2021)

Yes.

See here:









						The US keeps dodging the reputational bullets
					

The ongoing round of the OECD’s BEPS Project has attracted considerable attention.  This has been particularly true since the foreign ministers of the G7 included a paragraph in their communiq…



					www.irisheconomy.ie


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## Purple (21 Oct 2021)

Interesting piece in todays Irish Times on Pascal's comments about negotiating the deal. 
I've very glad he is Minister for Finance.


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