Dell pays only 1.5million in tax

Doom

http://www.independent.ie/business/irish/dell-pays-just-15m-tax-despite-sales-of-96bn-3276711.html

An absolute disgrace, companies like Dell shouldn't be getting away with paying Taxes this low, I bet they draw down grants from the IDA bigger than this.

Its high time that the tax breaks companies like this get are looked at a bit closer and there is a case for higher corporation tax too, I'm sure they would not run from Ireland if it was increased by 1 or 2%

Microsoft and Google are also guilty of paying extremely low taxes too.

Joey the lips

I always felt its a trade off. What the company is not paying in tax its paying in rsi stamps for employees as well as providing the economy where they operate money. however if the current rate of tax is say 10% and it equals 1.5 million than roughly 1 or 2% more whould only be another 300 000 if you think 1,5 million is a disgrace how can you be happy with 1.8 million

So what is a real figure you would be happy with and what do you base it on?

Just curious how you come to your conclusion its a disgrace?

thebman

How much does the Dell facility cost Dell in regards to being on an island off the coast of mainland Europe and further away than another island, Britain?

I have no doubt Dell are paying less tax here than they should but the reality is they wouldn't be here if they did. They'd just go to another country offering the tax breaks.

Doom

thebman wrote: »

How much does the Dell facility cost Dell in regards to being on an island off the coast of mainland Europe and further away than another island, Britain?

I have no doubt Dell are paying less tax here than they should but the reality is they wouldn't be here if they did. They'd just go to another country offering the tax breaks.

Dell have no manufacturing in Ireland anymore, so their costs are substantially less now.
And seriously the average person has to pay more taxes, why not our beloved multinationals?

Doom

Joey the lips wrote: »

I always felt its a trade off. What the company is not paying in tax its paying in rsi stamps for employees as well as providing the economy where they operate money. however if the current rate of tax is say 10% and it equals 1.5 million than roughly 1 or 2% more whould only be another 300 000 if you think 1,5 million is a disgrace how can you be happy with 1.8 million

So what is a real figure you would be happy with and what do you base it on?

Just curious how you come to your conclusion its a disgrace?

These companies should shoulder some of the cost of helping Ireland rise out of this recession, because ethically its the right thing to do.
Do you think its right that anyone business or person should not carry some part of the cost to bring Ireland back?

Nody

Doom wrote: »

These companies should shoulder some of the cost of helping Ireland rise out of this recession, because ethnically its the right thing to do.
Do you think its right that anyone business or person should not carry some part of the cost to bring Ireland back?

How about starting with the 50% of people working not paying tax then?

Doom

Nody wrote: »

How about starting with the 50% of people working not paying tax then?

Read my last post, I do mention it.....

Stheno

Doom wrote: »

These companies should shoulder some of the cost of helping Ireland rise out of this recession, because ethnically its the right thing to do.
Do you think its right that anyone business or person should not carry some part of the cost to bring Ireland back?

Ethically, not ethnically, sorry.

Anyway where do ethics come into it?

For every job the multinationals create they contribute to the economy,they pay employer taxes such as prsi at 10%+ of their paybill which would be far greater than the 1.5 million corporation tax that they paid. They also pay rates etc.

They are a business with a focus on profit and market share, they will utilise corporate tax structures like ours to their advantage, while providing employment and bolstering the economy in that way. Typical independant not clarifying it's story.

smcgiff

Doom wrote: »

These companies should shoulder some of the cost of helping Ireland rise out of this recession, because ethnically its the right thing to do.
Do you think its right that anyone business or person should not carry some part of the cost to bring Ireland back?

Dell owes ireland the total of sweet fûck all. If it owed anything to a country it would be to the US.

Dell pays millions a year in the paye its employees pay as well as employer's prsi - it certainly has no responsibility for ireland's bank debt.

NIMAN

I'm sure the likes of Dell, Intel, Apple, Microsoft, Google, Paypal etc all do their best to minimise their tax payable.

So are we overestimating how much these multi-nationals actually bring to the Irish economy?

Is it mostly the wages that they pay that help, rather than their taxes to Revenue?

Stheno

NIMAN wrote: »

I'm sure the likes of Dell, Intel, Apple, Microsoft, Google, Paypal etc all do their best to minimise their tax payable.

So are we overestimating how much these multi-nationals actually bring to the Irish economy?

Is it mostly the wages that they pay that help, rather than their taxes to Revenue?

It's also the effect they have on the wider economy.

They employ people (for the most part on good salaries) who then create more demand in their local economies for property, services etc, which then fosters more employment due to the need to meet that demand.

I think I read on here, that for every job created by a multinational one other is created in the local economy, but have nothing to back that up, but it makes sense that it would have an impact.

Doom

Stheno wrote: »

Ethically, not ethnically, sorry.

Anyway where do ethics come into it?

For every job the multinationals create they contribute to the economy,they pay employer taxes such as prsi at 10%+ of their paybill which would be far greater than the 1.5 million corporation tax that they paid. They also pay rates etc.

They are a business with a focus on profit and market share, they will utilise corporate tax structures like ours to their advantage, while providing employment and bolstering the economy in that way. Typical independant not clarifying it's story.

FFS, all companies would have to pay this or equivalent in any country, so why not a socially responsible tax % too

NIMAN

Stheno wrote: »

It's also the effect they have on the wider economy.

They employ people (for the most part on good salaries) who then create more demand in their local economies for property, services etc, which then fosters more employment due to the need to meet that demand.

I think I read on here, that for every job created by a multinational one other is created in the local economy, but have nothing to back that up, but it makes sense that it would have an impact.

Oh I have no doubt that their being here helps a lot, and creates plenty more jobs and wealth, but it would also help if they would pay a little more tax themselves;)

smcgiff

Doom wrote: »

FFS, all companies would have to pay this or equivalent in any country, so why not a socially responsible tax % too

Because they could up and leave and set up in countries with less pathetic tax laws.

Doom

smcgiff wrote: »

Dell owes ireland the total of sweet fûck all. If it owed anything to a country it would be to the US.

Dell pays millions a year in the paye its employees pay as well as employer's prsi - it certainly has no responsibility for ireland's bank debt.

Dell got plenty of IDA grants and continue to do....so it does owe Ireland!

Stheno

NIMAN wrote: »

Oh I have no doubt that their being here helps a lot, and creates plenty more jobs and wealth, but it would also help if they would pay a little more tax themselves;)

Then they would just leave and we'd lose that 1.5 million plus the PRSI they pay, plus the rates, the ESB etc, and have another few thousand on the dole.

Not to mention the impact on the wider economy.

Doom

smcgiff wrote: »

Because they could up and leave and set up in countries with less pathetic tax laws.

If that was the case why is Dell still here? And its production move to Poland did not go that smoothly.......

Stheno

Doom wrote: »

Dell got plenty of IDA grants and continue to do....so it does owe Ireland!

Have you got details of the total amounts they got versus the total corporation tax, rates, and employee related taxes they paid?

I suspect you will find the latter three outstrip the former significantly.

smcgiff

Doom wrote: »

Dell got plenty of IDA grants and continue to do....so it does owe Ireland!

You do the research. How much does it get in grants compared to the taxes and payroll it generates. I suspect the latter is far greater.

Stheno

Doom wrote: »

If that was the case why is Dell still here? And its production move to Poland did not go that smoothly.......

It didn't but to be honest, such moves rarely do.

Dell are still here in the more high market end of their business, sales and services across Europe Middle East and Africa.

They moved the low skill manufacturing jobs to a base where it would have been probably up to 8 times cheaper labour wise to do so, which from a business perspective makes sense.

smcgiff

Doom wrote: »

If that was the case why is Dell still here? And its production move to Poland did not go that smoothly.......

Well done, you're nearly there. It begins with a t, three letter word. There are other reasons, but it's a factor.

acorn1702

The MNCs are the only thing that held our economy together over the last 10 years. Those companies such as Intel and the large pharmaceutical companies are only here because of the tax incentives - you're totally underestimating the impact they have on stimulating the economy on various levels, primarily employment for not only third level graduates but for factory workers (Medtronic and Boston Scientific), If MNCs such as these stop coming to Ireland it will be devastating to the economy, never mind encouraging the ones we already have to leave.

NIMAN

Stheno wrote: »

Then they would just leave and we'd lose that 1.5 million plus the PRSI they pay, plus the rates, the ESB etc, and have another few thousand on the dole.

Not to mention the impact on the wider economy.

Of course if they left, or any of the other MNs, it would be a big blow for the country, but lets not kid ourselves, these companies aren't here out of kindness, they are doing well here and probably making more money than they could do elsewhere.

If they could do the same thing with the same conditions elsewhere they would be gone in the morning.

hmmm

Great idea, let's increase tax on companies who provide employment.

Stheno

NIMAN wrote: »

Of course if they left, or any of the other MNs, it would be a big blow for the country, but lets not kid ourselves, these companies aren't here out of kindness, they are doing well here and probably making more money than they could do elsewhere.

If they could do the same thing with the same conditions elsewhere they would be gone in the morning.

Of course, hence why corporation tax rates in Ireland are such a hot topic the past few years in the EU.

Again from reading on here, our corporation tax rate is not the lowest in the EU, France have a structure which is very kind to corporations depending on their profits.

smcgiff

NIMAN wrote: »

Of course if they left, or any of the other MNs, it would be a big blow for the country, but lets not kid ourselves, these companies aren't here out of kindness, they are doing well here and probably making more money than they could do elsewhere.

If they could do the same thing with the same conditions elsewhere they would be gone in the morning.

You're preaching to the converted - nobody here is likely to disagree with you there.

Stheno

acorn1702 wrote: »

The MNCs are the only thing that held our economy together over the last 10 years. Those companies such as Intel and the large pharmaceutical companies are only here because of the tax incentives - you're totally underestimating the impact they have on stimulating the economy on various levels, primarily employment for not only third level graduates but for factory workers (Medtronic and Boston Scientific), If MNCs such as these stop coming to Ireland it will be devastating to the economy, never mind encouraging the ones we already have to leave.

I'd also argue that the MNCs have actually helped to create a knowledge economy here. It's no surprise that pharma and IT are still doing well here, in part due to the investment by MNCs in their staff, and upskilling them.

Certainly when I worked in MNCs it was far easier to get access to education and upskilling than in any other sector I've worked in. That added to my skills as an employee/jobseeker.

gozunda

Doom wrote: »

Dell have no manufacturing in Ireland anymore, so their costs are substantially less now.
And seriously the average person has to pay more taxes, why not our beloved multinationals?

Ok application of some logic - as they are not manufacturing in Ireland anymore Dells profits as well as the costs from these activities are also considerably reduced. Dell would appear to have a reduced presence that is more concentrated in the area of technology solutions than hardware production as was previous.

For example 'Paul' can point out that 'Peter' is not paying as much tax as I think he should be

But if 'Peter' is not earning as much as he was previously but 'Paul' thinks that Peter should be paying more now he doesn't have the same costs because he travels to work two days a week only

Doesn't quite work that way imo..

smcgiff

Ditto - I worked in Dell for two and a half years and learned methods and standards there that i've brought forward into my other roles.

NIMAN

So its basically a race to see who can let the MNCs off with as much tax as possible that wins? Ireland has done it up to now, but if Europe is complaining about our tax rate, then they obviously want us to start charging the full 12.5% then? While they of course don't!

I know it would be utter madness now for us to demand the full 12.5% off them. This would bring in money short term but a few years down the line we'd be begging them to stay as they were looking at other locations around the world.

Plus I'm sure they aren't breaking any laws when they pay less than 12.5%. Loopholes are there and they are using them.

Stheno

NIMAN wrote: »

So its basically a race to see who can let the MNCs off with as much tax as possible that wins? Ireland has done it up to now, but if Europe is complaining about our tax rate, then they obviously want us to start charging the full 12.5% then? While they of course don't!

I know it would be utter madness now for us to demand the full 12.5% off them. This would bring in money short term but a few years down the line we'd be begging them to stay as they were looking at other locations around the world.

Plus I'm sure they aren't breaking any laws when they pay less than 12.5%. Loopholes are there and they are using them.

That's probably too narrow a view to take on it tbh.

Our tax rates are very competitive, but not the be all and end all.

You've also got a relatively highly skilled workforce, the fact that English is our first language, we are becoming cheaper in terms of additional cost, and are part of the EU, so we can easily attract other language speakers.

A recent survey showed we are the second most attractive country for FDI in the world.

Also we do provide mechanisms and tax breaks in recent years for companies to attract talent from outside Ireland if they cannot find it here.

KyussBishop

We'll certainly need to hold on to the low corporation tax for the foreseeable future, as it's one of the few things still attractive about setting up business in our country.

Eventually though, there's going to need to be an international crackdown on tax evasion, which will necessarily include Ireland bringing the corporation tax in line with other countries;
this is steadfastly not an option for us right now, but it's something that will need to be sought when our economy is healthy again, when we can afford to bring the tax back in line.

What is more important than the corporation tax, is having a healthy enough economic and infrastructural environment to attract business despite corporation tax, not because of it.
Government has been piss poor at properly investing in and managing the right infrastructure here, so there's quite a lot of work that'd need to be done to make us genuinely competitive, not just a place to sieve off tax losses.

Stheno

KyussBishop wrote: »

We'll certainly need to hold on to the low corporation tax for the foreseeable future, as it's one of the few things still attractive about setting up business in our country.

Eventually though, there's going to need to be an international crackdown on tax evasion, which will necessarily include Ireland bringing the corporation tax in line with other countries;
this is steadfastly not an option for us right now, but it's something that will need to be sought when our economy is healthy again, when we can afford to bring the tax back in line.

What is more important than the corporation tax, is having a healthy enough economic and infrastructural environment to attract business despite corporation tax, not because of it.
Government has been piss poor at properly investing in and managing the right infrastructure here, so there's quite a lot of work that'd need to be done to make us genuinely competitive, not just a place to sieve off tax losses.

How can you say we are not genuinely competitive if we are one of the countries most attracting FDI?

Maura74

It appears that these large companies do not want to pay their fair share of taxes, apparently Starbucks had made over £3bn in UK sales since 1998 but had paid less than 1% in corporation tax. Wounder are they doing the same in Ireland are avoiding taxes like in the UK. Other large companies like Amazon are doing the same thing.

http://www.bbc.co.uk/news/business-19967397

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9631702/Foreign-firms-face-tax-crackdown-in-UK-and-Europe.html

KyussBishop

Stheno wrote: »

How can you say we are not genuinely competitive if we are one of the countries most attracting FDI?

We are attractive because of our use as one step in tax evasion plan, less as a genuinely good country to do business; that the loss of our low corporation tax would decimate us right now, displays this well.

poeticseraphim

The low corporate tax rate is good for Ireland....end thread.

Stheno

This is the actual article.

It's very confusing as it is using sales figures against tax paid for a lot of it, and comparing what they would in other jurisdictions, but when you dig into it the following is evident:

Dell: Profit €9.7m. It paid tax of €1.5m on those profits. Tax rate 15%
Microsoft: Profit €563m Tax €76m Tax rate 12%

DELL Products, one of Ireland's biggest multinational companies, paid a tax rate of just €1.5m despite clocking up sales of €9.6bn.

The top five multinationals in Ireland including Dell, Google and Microsoft, paid €183m tax, less than 0.5 per cent of their sales of over €45bn, according to analysis by the Sunday Independent.

The multinationals are also paying taxes at a far lower rate than their parent companies back in the US, indicating that margins generated in Ireland are extremely tight.

Last week TD Richard Boyd Barrett revealed that while Irish-based companies, both foreign-owned and indigenous, declared taxable profits of €61bn in 2010, they paid tax of just €3.9bn, an effective tax rate of 6.4 per cent as against the headline corporation profits tax rate of 12.5 per cent.

Dell Products, the computer giant's key Irish firm, recorded pre-tax profits of €9.7m. It paid tax of €1.5m on those profits. These indicate a pre-tax profit margin of just over 0.1 per cent. If Dell Products, which accounts for a fifth of Dell's total sales, achieved its parent company's 5.4 per cent margin then it would have recorded pre-tax profits of €518m.

Microsoft Ireland had sales of €13.3bn in 2011 and recorded pre-tax profits of €593m, based on filings. It paid taxes of €76m on those profits, an effective tax rate of 12.8 per cent. However, Microsoft Ireland's pre-tax profits, a mere 4.4 per cent of its total sales, are in stark contrast to parent company Redmond, Washington's 2011 pre-tax margin of 30 per cent. If Microsoft Ireland had recorded a similar margin it would have reported 2011 pre-tax profits of €4bn.

Google Ireland is the second-largest Irish-based multinational with 2011 sales of €12.4bn on which it recorded pre-tax profits of just €24m and paid €22m in taxes, an apparent tax rate of over 90 per cent. A comparison with the Californian parent company is instructive. In 2011, Google's pre-tax profits were the equivalent of 36 per cent of its sales while those of Google Ireland, which accounted for about half of those sales, were a mere 0.19 per cent of sales. If Google Ireland had returned a pre-tax margin comparable to that of its parent, it would have recorded pre-tax profits of almost €4.5bn.

Other multinationals where the Irish profit margins fail to match those at their parent company include Larry Elisson's Oracle. Oracle EMEA lost €39m on total sales of almost €5.8bn in 2011 and paid tax of €38m. By comparison, the parent company recorded a pre-tax margin of 32 per cent over the same period. A similar margin would have translated into pre-tax profits of €1.85bn at its Irish subsidiary.

BSC International, the Irish-based subsidiary of pharmaceutical company Boston Scientific, recorded pre-tax profits of €295m on sales of €4.07bn in 2010. It paid taxes of €45m on those profits. However, its parent company recorded losses of €822m on sales of €6.04bn in 2010.

So it looks like just using those two examples and not using Google (90% tax) or Oracle in the article, the MNCS are paying over and above the 12% required.

NIMAN

But if France's effective tax rate is lower than ours then where's the problem?

If we are forced to charge 12.5% then everyone else should be forced to charge the headline rate too.

Fair's fair.

KyussBishop

poeticseraphim wrote: »

The low corporate tax rate is good for Ireland....end thread.

Pretty much It should be looked at more as a short/medium-term opportunity to use the profits to develop our infrastructure better though, because it's not going to last forever, and we will need to develop the right environment to attract business on merits other than low tax.

Stheno

NIMAN wrote: »

But if France's effective tax rate is lower than ours then where's the problem?

If we are forced to charge 12.5% then everyone else should be forced to charge the headline rate too.

Fair's fair.

Nobody is saying we will be, and if you read my post, and the entire article, it's clear that many MNCs are paying far more than 12.5% corporation tax, not including PRSI, rates etc, yet we are still attractive to them as an investment country.

mav79

Reduce the corporate tax rate more.
Entice more companies into Ireland.
Reduce amount of people out of work.
Simples.

Stheno

mav79 wrote: »

Reduce the corporate tax rate more.
Entice more companies into Ireland.
Reduce amount of people out of work.
Simples.

Not in IT or Pharma, when we have over two thousand jobs companies are struggling to fill in IT due to lack of qualified and experienced people.

This is where we currently fail, we are shooting ourselves in the foot as we do not have an educational system that supports languages and science, so we end up with a shortage of good candidates in those fields we could use.

Companies then import that talent, and it adds to our economy. A lot of people in IT (using it as I work in the sector) are highly mobile and move with the jobs, so it's not a long term win importing people with language or IT skills.

We cannot compete in manufacturing etc as we are not cost effective there.

As a country we need to look to change the focus of education (get rid of Irish e.g.) to have a higher skilled workforce emerging at second level.

hmmm

We are a tax haven and ultimately we will be forced to change our CT rate. That's something we should be planning for, but of course no-one in this country plans beyond their next pint.

Nevertheless, there is no point in us shooting ourselves in the foot before we are forced to change.

mav79

Stheno I wouldn't disagree with any of your points, just saying that an increase in the corporate tax rate is not going to help with any problems that this country is facing, if anything its just going to cause more problems in my opinion.

Stheno

mav79 wrote: »

Stheno I wouldn't disagree with any of your points, just saying that an increase in the corporate tax rate is not going to help with any problems that this country is facing, if anything its just going to cause more problems in my opinion.

I don't agree with increasing the corporate tax rate either

I also don't necessarily agree that it will have to be increased due to the EU, especially when effective corporate tax rates across the EU are examined.

I do however think that we as a country have a very outmoded approach to education, and preparing to have a workforce to support the sort of companies who want to invest in this country, without them having to worry about not being able to fill jobs

Joey the lips

Doom wrote: »

These companies should shoulder some of the cost of helping Ireland rise out of this recession, because ethically its the right thing to do.
Do you think its right that anyone business or person should not carry some part of the cost to bring Ireland back?

Actually no i dont.why should they?

If you ever ran a business you woul understand why. I think a business should pay tax and if the govt sets tax to low in your opinion then its the govt you should be annoyed with

You need to understand your arguement and become familar with the 80/20 rule.

sock puppet

Stheno wrote: »

This is the actual article.

It's very confusing as it is using sales figures against tax paid for a lot of it, and comparing what they would in other jurisdictions, but when you dig into it the following is evident:

Dell: Profit €9.7m. It paid tax of €1.5m on those profits. Tax rate 15%
Microsoft: Profit €563m Tax €76m Tax rate 12%



So it looks like just using those two examples and not using Google (90% tax) or Oracle in the article, the MNCS are paying over and above the 12% required.

Eh way to miss the point. Those profits are so low because of the Double-Irish arrangement. Of course we're beneficiaries of this tax avoidance so the OP shouldn't be complaining from a revenue point of view. It's more the long term sustainability of this that'd I'd have an issue with.

Nody

Joey the lips wrote: »

Actually no i dont.why should they?

<insert group> has more money then me / more money then I think is needed and should therefore pay more! It's their moral duty after all as the books needs balancing.

Is that not the essence of at least half the discussion here these days? In general the OP will not belong to the group and the group varies including the level of arguments but they all boil down to the above statement be it PS, companies, rich people, banks, unemployed etc. that is the target of the day.

I miss the posts that actually had economical discussion backed up by numbers and theories as most threads today is only a variation on the above with the same circle of arguments with out facts/theory to back it up beyond a independent talk piece level of detail (and yes I'm guilty of the that as well more often then not).

KyussBishop

Nody wrote: »

<insert group> has more money then me / more money then I think is needed and should therefore pay more! It's their moral duty after all as the books needs balancing.

Is that not the essence of at least half the discussion here these days? In general the OP will not belong to the group and the group varies including the level of arguments but they all boil down to the above statement be it PS, companies, rich people, banks, unemployed etc. that is the target of the day.

I miss the posts that actually had economical discussion backed up by numbers and theories as most threads today is only a variation on the above with the same circle of arguments with out facts/theory to back it up beyond a independent talk piece level of detail (and yes I'm guilty of the that as well more often then not).

It's not primarily how much money people have though, it's the distribution of earnings in the economy; in the US right now, something like 90% of earnings go to a group of 1% of people.

I have no problem with people genuinely earning their money through hard work etc., but there are so many forms of economic "rent seeking" right now, where people can siphon off money through no productive effort, and this is causing demonstrable income inequality and harm to society.

Everyone else in society pays for this economic rent seeking, such as when it applies to unavoidable commodities, or when unavoidable portions of the economy (like housing) are deliberately distorted, to make things more expensive, so it is a lot like a tax in its own right (one which provides no societal benefit).

murphaph

Doom wrote: »

And seriously the average person has to pay more taxes, why not our beloved multinationals?

Because our badly run economy is almost totally dependent on them as we failed utterly to develop indigenous industry when we had the chance. Simple really. Ever heard of biting off your nose to spite your face?

Joey the lips

There is a couple of simple rules to live buy if its cheaper to make it it will be made Eg Intel. If its cheaper to buy it then it will be bought eg Banta global solutions.

If a business traded exactly where it produced the most profit then this would be based in the middle of its sales area which is usually an area with the biggest customer base. eg the US.

The reason multinationals trade abroad is incentives. ie low tax rate, supports to market, low start up costs remember when the big multinational moved to poland recently.

If we dont offer Dell incentives then someone else will.

Its a simple case of politics again. incentives bring jobs. Jobs bring wealth, wealth generates spending which provides jobs, all contribute to economic growth and this is why fianna fail lasted so long in office.