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 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.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.
I suspect you would notice it in your pay packet, who do you think will get caught for the shortfall in corporation tax,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.
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.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.
I agree it is an interesting capitalist idea coming from an unusual sourceI 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.
That'll also influence M&A activity globally.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.”
In fairness, that among numerous other issues has always been a problem with a global taxation plan.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?
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 missedI'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
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.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.
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.
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%.
Any profits of US MNC taxed at 12.5% here are subsequently subject to US CT
You have to read all of Seamus Coffey's stuff to get a handle on it.
The 15% is not the issue. This is all about where corporations are taxed.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
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.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.
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.we're a small county that needs a competitive edge,
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