EU commissioner wants Ireland to raise the 12.5% corporate tax. Yay or Nay?

GizAGoOfYerGee

Olli Rehn, the European commissioner in charge of economic policy, said the dire state of its public finances means Ireland will likely have to surrender its status as a low-tax haven within the EU.

"It's a fact of life that after what has happened, Ireland will not continue as a low-tax country, but rather it will become a normal-tax country in the European context," he said.

Microsoft, Google, Amazon, eBay, PayPal, Yahoo!, Facebook and Pfizer (among others) now have European headquarters and/or operational bases in Dublin city.

By raising the Irish coprporate tax, we risk losing these technology companies to the UK, Germany and others.

Brian Lenihan, the Irish finance minister, acknowledged this week that taxation will form part of the solution to stabilising the deficit. But Irish ministers insist the country’s low 12.5 per cent corporate tax rate will not be altered.

Thoughts?

Donkey Oaty

Ireland says "No".

mikom

Donkey Oaty wrote: »

Ireland says "No".

Lisbon says Yes.

http://williamthecoroner.files.wordpress.com/2008/09/istock_can-of-worms.jpg

SEPT 23 1989

They have us by the balls because of FF and the banks

Scuid Mhór

Donkey Oaty wrote: »

Ireland says "No".

mikom wrote: »

Lisbon says Yes.

http://williamthecoroner.files.wordpress.com/2008/09/istock_can-of-worms.jpg

and that was that.

brianthebard

We can definitely afford to raise it a couple of percent with minimal impact on businesses. However France would love to push it up as far as possible, and if they get their boot in it could be over 20%.

johngalway

I voted 15%. Though my stand would be keep it at 12.5%. However, we're not in the best position, and if pressed hard I would not like to see the rate go above 15%.

force eleven

Why are they bothered about our puny little island anyway? Apart from that 50 billion euro deficit of course...

The Brussels eurocrats have wanted harmonization on the tax front for years, and now they see the opportunity at last. It won't be the only price we'll pay.

At least Peter Sutherland will be happy.:mad:

kippy

Its got fcuk all to do with Lisbon. Its to do with the billions we now require to borrow from Europe to stay afloat.
Typical anti lisbon fare - anything negative that has happened in in the last year has been blamed on Lisbon by the Anti Lisbon crowd, without them acknowledging the elephant in the room.
Has anyone done a Cost Benefit Analysis on what the extra income to the exchequer would be for every percent raised in this tax (not of course taking into account the potential losses?)
Id rather see our political class (Dail, seanad, local councilers and associated "support services" and a number of higher paid civil servants as well as matrix management structures) cut in numbers. We are way over represented.
Reduce social welfare, reduce minimum wage by a lesser percent than the social welfare, review all Public sector quangos/roles, bring ALL sectors of society into the tax net.

Wolfe Tone

That tax rate is about the only good thing with our economy. Keep it that way!!

TheZohanS

Keep it at 12.5%, if we mess around with that the likes of Intel, HP and other multinationals might up and move somewhere else.

Mr Benevolent

We must increase our tax base, we have no other option.

Donkey Oaty

mikom wrote: »

Lisbon says Yes.

Foreign companies then say "Adeus".

MCMLXXXIII

According to what you say, German tax is 15%. According to your chart, German tax would be at least double because of local tax, which Ireland does not have.

Taxes could easily be raised to 15% without loosing jobs to Germany, Poland, the UK, etc.

Unless, of course, places like Macedonia, Latvia or Bulgaria are considered a real threat for Irish business and employment. Statistically, their wealth and education distribution is about the same as Ireland, and they have a standard of living that is only slightly worse.

I think the question should be: Why are companies not moving to Cyprus with comparable distribution of wealth, education, standard of living and Purchasing Power when their tax is only at 10%, and how high of a tax be charged before it runs these companies out of Ireland?

Wolfe Tone

Increase the corporate tax perhaps, but lower the minimum wage?

Orange69

As a tax heaven Ireland will never innovate or strive to be better. Its like being on the dole long term or giving free money to the 3rd world. Lack of necessity to do better facilitates stagnation and apathy.

Donkey Oaty

MCMLXXXIII wrote: »

Unless, of course, places like Macedonia, Latvia or Bulgaria are considered a real threat for Irish business and employment. Statistically, their wealth and education distribution is about the same as Ireland, and they have a standard of living that is only slightly worse.

Easy there, 1983 - there's no comparison, surely? A quick search suggests that the average take-home pay in Macedonia is less than 400 Euro a month.

Augmerson

Low Corporate tax means we attract multi-nationals who then employ thousands of workers sure, but the profits made by those companies, which are huge, are just going straight out of the economy.

galwayrush

FF promised it was not in danger , obviously we have nothing to worry about, it's not like they tell lies now, is it?..................oh wait................:eek:

MCMLXXXIII

Donkey Oaty wrote: »

Easy there, 1983 - there's no comparison, surely? A quick search suggests that the average take-home pay in Macedonia is less than 400 Euro a month.

Donkey, you are the first person to ever refer to me by 1983 - the true meaning of my screen name...most people don't get it!
That's awesome.

On another note: yes, I did look at that, but how much did the Irish make before the Celtic Tiger began? It might not be as low as Cyprus's 900 Euro a month, but that is why I asked a two part question. Second part: "...how high of a tax be charged before it runs these companies out of Ireland?"

Could someone just ONCE spell it correctly 'yea or nay'?

Donkey Oaty

MCMLXXXIII wrote: »

Second part: "...how high of a tax be charged before it runs these companies out of Ireland?"

That's the important question, but whatever the answer is, we should set the tax at very slightly lower.

Jeboa Safari

If corporation tax is raised to an EU level we're proper ****ed. It's one of the few things our economy still has going for it. I'd actually go and protest if they were going to try and raise this, and I'm no fan of protests at all.

musings

Augmerson wrote: »

Low Corporate tax means we attract multi-nationals who then employ thousands of workers sure, but the profits made by those companies, which are huge, are just going straight out of the economy.

Correct, and I might add that a large proportion of the workers are foreigners here for a short time, esp in the case of european customer service centres where native language speakers are required.

While I do think these multi nationals are helpful here, I think they are completely over hyped and are of a much lower real significance than Agriculture and the food industry.

The chemical industry in Ringaskiddy doesn't even pay Irish VAT!

Jeboa Safari

musings wrote: »

Correct, and I might add that a large proportion of the workers are foreigners here for a short time, esp in the case of european customer service centres where native language speakers are required.

While I do think these multi nationals are helpful here, I think they are completely over hyped and are of a much lower real significance than Agriculture and the food industry.

The chemical industry in Ringaskiddy doesn't even pay Irish VAT!

Those workers pay taxes and spend money here though

musings

Jeboa Safari wrote: »

Those workers pay taxes and spend money here though

Yes, but that goes for all workers native or foreign (well almost all), and wouldn't it be better if all these workers had tax paying employers also?

Sea Sharp

If we raise the taxes even slightly, the multinationals will get spooked and pull out. 50bn in debt with the possibility of IMF intervention. The 12.5% tax rate is the only thing this country has going for it and it was what caused the Celtic Tiger.

Absolutely NO, NO, NO and NO to rising corporation taxes.

Although, hypothetical situation: If we raised it to 50% over night, how much money could we make before every company managed to pack up and leave. If that figure works out at 50bn plus, it's food for thought. :pac:

Jeboa Safari

musings wrote: »

Yes, but that goes for all workers native or foreign (well almost all), and wouldn't it be better if all these workers had tax paying employers also?

They do have tax paying employers. Just not at the big rates like the European countries. If you upped it, theres a good chance they'd leave. So you'd lose out on the tax they're already paying, aswell as the workers they employ.

oppenheimer1

When the commissioner was talking he wasn't referring specifically to Corporation tax, but the low rate of personal taxation that exists in Ireland, relative to other European countries. Irish wages are higher and personal tax rates are a lot more generous than in most other countries.


As for corporation tax, that was the goose that laid the first golden egg, and the holy grail of the Irish economy. It would be a foolish government to accept a bailout package in exchange for a rise in rates. We haven't managed to steal all the FDI from europe because of it, if we had we wouldn't be in the situation we find ourselves in either. Another thing people are forgetting that while we might have to go beg for money from the solidarity fund, the Irish government is in a relatively strong position with regards to negotiating. The money we have borrowed belongs largely to German banks and if we cannot pay, they will collapse, precipitating another banking crisis. In addition an Irish default would swiftly bring an end to the Euro and the European project, Germany's baby, would be teetering on the edge of collapse. If the Irish are pushed too far and made to give up too much sovereignty, they could make the whole house of cards come down. Blackmail may be the last resort for our scoundrels.

musings

oppenheimer1 wrote: »

When the commissioner was talking he wasn't referring specifically to Corporation tax, but the low rate of personal taxation that exists in Ireland, relative to other European countries. Irish wages are higher and personal tax rates are a lot more generous than in most other countries.


As for corporation tax, that was the goose that laid the first golden egg, and the holy grail of the Irish economy. It would be a foolish government to accept a bailout package in exchange for a rise in rates. We haven't managed to steal all the FDI from europe because of it, if we had we wouldn't be in the situation we find ourselves in either. Another thing people are forgetting that while we might have to go beg for money from the solidarity fund, the Irish government is in a relatively strong position with regards to negotiating. The money we have borrowed belongs largely to German banks and if we cannot pay, they will collapse, precipitating another banking crisis. In addition an Irish default would swiftly bring an end to the Euro and the European project, Germany's baby, would be teetering on the edge of collapse. If the Irish are pushed too far and made to give up too much sovereignty, they could make the whole house of cards come down. Blackmail may be the last resort for our scoundrels.

Evil but Brilliant!!!!

gleep

We should keep the rate at 12.5%. And right now the dept of finance (or someone competent) should be looking at introducing a CT tax credit for companies to incentivise them to bring jobs here.

Just an idea, but could we give companies a tax credit for every job they create? Sure, we'd loose CT revenue, but we'd get people off the dole, paying PAYE and spending in the economy. As I said just an idea, it might be foolish but we need ideas if we're to get out of this.

johnmcdnl

Augmerson wrote: »

Low Corporate tax means we attract multi-nationals who then employ thousands of workers sure, but the profits made by those companies, which are huge, are just going straight out of the economy.

but if i have a job with a multinational company who pay me lots of money isn't it better that they pay 12.5% tax rather than the situation where they leave the country and I go to the dole queue and Ireland looses the bit of tax money that they were getting from the multinational...

it'd be a different story if we had a wide base of large irish companies that could employ the whole country - but we don't - and if we push the multinationals out then ireland is well and truly ****ed because where the **** are all the people who loose their jobs going to get another job if we're relying on irish companies to employ them

gurramok

They won't go to Cyprus because they have an unresolved territorial dispute which has recently resulted in civil conflict. (we resolved ours in the 90s!)

And yeh I work in a multinational, where would the hundred odd thousand of us get jobs if the MNC's left us?

KINGVictor

musings wrote: »

Correct, and I might add that a large proportion of the workers are foreigners here for a short time, esp in the case of european customer service centres where native language speakers are required.

While I do think these multi nationals are helpful here, I think they are completely over hyped and are of a much lower real significance than Agriculture and the food industry.

The chemical industry in Ringaskiddy doesn't even pay Irish VAT!

I disagree with you, they are certainly not over-hyped for the realities of a small open economy like Ireland. Have you considered the positive impacts of the investments from these MNCs, for instance , starting with the most obvious the employment they create and more importantly the spillovers to the Irish economic and social milleu. Ireland successfully transformed from a semi-developed country to a developed nation in a very short period due to her vibrant and effective FDI strategy that attracted lots of foreign firms and the corporation tax of 12% being a key factor.
This foreign investments led to Ireland producing one of the most skilled workforce in Europe in a very few years ( the world bank refer to the Irish story as a miracle to be copied by emerging economies) and led to the improvement of infrastructures to facilitate FDI attractiveness.

You are absolutely correct that there should be more thought on reviving the agri-food sector but it certainly should not be at the expence of attracting foreign investment. Unless there is a sudden and unforseen paradigm shift, globalisation is still the name of the game and for a small country like Ireland to compete in the modern world , the government should guard the current corporation tax jealously.

You have to realise it is not coincidence that paypal, facebook, google, microsoft, Mcafee etc etc have Ireland as their EMEA headquarters and like all businesses if the motivation to locate here expires , they will simply leave.

It is a fact that MNCs do a lot of transfer pricing which means some of their profits are not accounted for Ireland ( which unfortunately is common business practice) but have you considered the huge tax they pay to the exchequer, salaries they pay their workers and the spillovers to the economy?

LookingFor

I rarely am so curt, but this guy, and his friends, need to STFU.

It's rude, and unhelpful. Like someone gossiping about you while you're not at your best. It's very clear there are many in Europe who would like Ireland to increase its corporation tax -that's been clear for a long time already - and they're just circling like vultures now.

th3 s1aught3r

It wont be a decision we will make

Cookie_Monster

drop it, encourage more multi nationals and encourage companies to head quarter here with a one desk office just to funnel profits (like FIFA and others)

gurramok

The American Chamber of Commerce here is outraged!
http://www.irishtimes.com/newspaper/breaking/2010/1001/breaking59.html

Manach

In my experience of the IT sector, we have definite advantages such as skilled workforce, English speaking and timezone to deal with US and EMEA countries. But without that extra benefit of low-tax, the possiblity of Multi-Nationals pulling out increases as they seeking that extra profit elsewhere.

Mrmoe

It should be kept the way it is or if anything it should be lowered. There are a number of reasons why MNC see Ireland as an attractive spot and the low tx rate is one reason behind it. Some of the other factors have been a bit shaky so we don't want to rock the boat too much more.

MCMLXXXIII

Bloomberg: Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.

Google’s income shifting -- involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” -- helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.

...

Allocating the revenue to Ireland helps Google avoid income taxes in the U.S., where most of its technology was developed. The arrangement also reduces the company’s liabilities in relatively high-tax European countries where many of its customers are located.

The profits don’t stay with the Dublin subsidiary, which reported pretax income of less than 1 percent of sales in 2008, according to Irish records. That’s largely because it paid $5.4 billion in royalties to Google Ireland Holdings, which has its “effective centre of management” in Bermuda, according to company filings.

It seems that the medium-low taxes may be a double-edged sword. It provides jobs, but limits local investments.

ScumLord

I watched that dispatches about how the rich avoid taxes and it's not right that companies can avoid contributing to the people they make their profits off but our low tax rate is just about all we've got to entice companies in. We need any competitive edge at this point.

1% is a lot, to a big company it can mean millions maybe even an entire Christmas bonus for one director which just won't do, they would leave.

If they're looking for someone to tax, tax the **** out of the solicitors and law firms that have been shafting the country just as much as the banks.

Biggins

Aaa yes... The European commissioner... And where do I suspect pressure upon him to say these things is coming from?
Our competition such as France and Germany? I wonder!

Long story short: Yet again we gave to stand up for ourselves as a single nation, just once in a while, and say "Sorry - we don't jump to your "orders" every time!"

Sticky_Fingers

oppenheimer1 wrote: »

When the commissioner was talking he wasn't referring specifically to Corporation tax, but the low rate of personal taxation that exists in Ireland, relative to other European countries. Irish wages are higher and personal tax rates are a lot more generous than in most other countries.


As for corporation tax, that was the goose that laid the first golden egg, and the holy grail of the Irish economy. It would be a foolish government to accept a bailout package in exchange for a rise in rates. We haven't managed to steal all the FDI from europe because of it, if we had we wouldn't be in the situation we find ourselves in either. Another thing people are forgetting that while we might have to go beg for money from the solidarity fund, the Irish government is in a relatively strong position with regards to negotiating. The money we have borrowed belongs largely to German banks and if we cannot pay, they will collapse, precipitating another banking crisis. In addition an Irish default would swiftly bring an end to the Euro and the European project, Germany's baby, would be teetering on the edge of collapse. If the Irish are pushed too far and made to give up too much sovereignty, they could make the whole house of cards come down. Blackmail may be the last resort for our scoundrels.

+1
Europe doesn't give a damn about Ireland and are only looking out for their own interests. If push comes to shove and they start paying hardball we should seriously consider looking out for our own best interests and if that means threatening to tear down the Euro then so be it. If anything we should be considering lowering the CT rate and try and get some more external investment into this country. I wonder if Dell would have stayed if the rate was slightly lower, think about all the money taken out of the Mid West economy when they shut up shop.

iPlop

Who the hell are the two people that want it to 30% :eek::eek::eek::eek::eek:

Biggins

Septic Leper wrote: »

Who the hell are the two people that want it to 30% :eek::eek::eek::eek::eek:

I suspect the heads of France and Germany have Boards.ie accounts here! :pac:


??? :eek:

senordingdong

Ecumenical matter.