Ireland and corporate tax avoidance

antoobrien

20Cent wrote: »

Threads about corporate tax avoidance that list of companies didn't fold or leave because the tax was too high.

Nice set of blinkers.

20Cent wrote: »

Any examples of these wonderful initiatives these tax avoiders are doing in Ireland? Some google employees getting sponsored for the marathon doesn't count.

Google Corporate social responsibility, there are a lot of companies that have pages on it.

who_me

I read on NYTimes that Apple has negotiated a 2% corporate tax rate here (!!!), and some income is untaxed. It's kind of staggering how they're claiming the income is stateless and thus subject to no tax.

I know the importance of bringing in foreign investment, but Ireland to me is like the stereotype of an abused girlfriend who takes any kind of abuse, she's just terrified of being left alone. Other small nations prosper without resorting to becoming tax havens, why is Ireland such a special case?

What an utterly lop-sided tax system we have here. Is it any wonder people are so resistant to things like the property tax, when the richest corporations in the world get a free-ride here. I guess the truth is fairly self-evident: the government will screw the tax-payer simply because they can, because the tax-payer won't uproot themselves and leave, whereas the corporations can and will.

Duggys Housemate

who_me wrote: »

I read on NYTimes that Apple has negotiated a 2% corporate tax rate here (!!!), and some income is untaxed. It's kind of staggering how they're claiming the income is stateless and thus subject to no tax.

I know the importance of bringing in foreign investment, but Ireland to me is like the stereotype of an abused girlfriend who takes any kind of abuse, she's just terrified of being left alone. Other small nations prosper without resorting to becoming tax havens, why is Ireland such a special case?

What an utterly lop-sided tax system we have here. Is it any wonder people are so resistant to things like the property tax, when the richest corporations in the world get a free-ride here. I guess the truth is fairly self-evident: the government will screw the tax-payer simply because they can, because the tax-payer won't uproot themselves and leave, whereas the corporations can and will.

The Dept. of Finance said that was incorrect. There are no negotiations with separate companies here. They pay 12.5% on what they declare.

And where do you think these companies owe taxes?

1) Here?
2) The UK where they have the audacity to sell stuff?
3) The US?

If you believe 3) then you can't believe 1).

( 2 is just rubbish).

Fratton Fred

Duggys Housemate wrote: »

This investigation by the UK is a sham. You don't get corporation tax on sales in your country. You get corporation tax on profits where the company selling is based. Many of these companies have been here since they were tiny startups - Apple has been here since 1980, before the Mac, 27 years before the iPhone. It was a high corporation tax then. If Apple owes the UK tax on sales, then BMW in Germany owes taxes on sales in the UK, not profits to Berlin. ( which is bollocks). Amazing the number of Irish people who are prepared to disregard Irish sovereignty.

Thats a rubbish claim. Legally and morally, or any other way.

When a BMW dealer sells a car, where do they pay tax to?

Duggys Housemate

Fratton Fred wrote: »

When a BMW dealer sells a car, where do they pay tax to?

Simple Fred.

The BMW dealer pays tax on the difference between the retail and the manufacturing price of the car ( his revenue) summed over the year, minus his expenses over the year, which is his profits. But he is in the UK.

The dealer is not a BMW employee. BMW is not in the UK.

In another analogy. Carphone warehouse import a Samsung S4 at £200 and sell at £300. Samsung books the profit on the £200 (their sale to channel) whatever that is and declares it in Korea. Carphone Warehouse declare in the UK the £100 revenue ( etc.) and that minus expense is profit.

In another example an American retailer sells Cadburys imported from the UK. He pays taxes on the difference between the wholesale and retail cost of the bar, minus expenses, and Cadburys books the profit - if any - on the wholesale price of the bar. It declares it's profits in the UK.

I knew this when I was 12.

seamus

This is all pretty much just sabre-rattling, particularly from the UK ahead of any discussion on a possible withdrawal from the EU.

It's an example of where the conflict between free markets and patriotism comes to a head. People need to free to buy and sell products, but politicians like to think that a company has a national identity and thus "American" companies should pay tax in america and companies who sell stuff into the UK should pay tax on what they sell in the UK. It's the erroneous belief that there's some kind of moral obligation on a company or an individual to pay more tax than they are legally due to.

If a company is not doing anything illegal, but you're not happy about it, then the problem is with the law, not with the company.

I say it's sabre-rattling because very little will come of this. If the US decide that companies need to pay US tax on profits, then the huge corporations will completely up sticks and move. If Apple's profits are to be taxed at US rates, then they will need to make their products more expensive, and they will be murdered in all other markets as competitors move in with cheaper products.
Instead, they will make far better profits by completely removing themselves from the US and exporting their products to the US. Companies don't have citizenship, so if Google aren't US-based, the US can't do anything about their profits.

The US and the UK know this though.

Fratton Fred

Duggys Housemate wrote: »

Simple Fred.

The BMW dealer pays tax on the difference between the retail and the manufacturing price of the car ( his revenue) summed over the year, minus his expenses over the year, which is his profits. But he is in the UK.

The dealer is not a BMW employee. BMW is not in the UK.

In another analogy. Carphone warehouse import a Samsung S4 at £200 and sell at £300. Samsung books the profit on the £200 (their sale to channel) whatever that is and declares it in Korea. Carphone Warehouse declare in the UK the £100 revenue ( etc.) and that minus expense is profit.

In another example an American retailer sells Cadburys imported from the UK. He pays taxes on the difference between the wholesale and retail cost of the bar, minus expenses, and Cadburys books the profit - if any - on the wholesale price of the bar. It declares it's profits in the UK.

I knew this when I was 12.

Thanks for being patronising.

And Google UK buy services from Google Ireland, mark them up and sell them to companies in the UK, no? The advertising is on behalf of UK companies, targeting UK markets and managed by Google in the UK, except according to Google, it isn't.

The argument is where does the sale take place. If, as Google claim, it takes place in Ireland, what are their sales people in the UK doing? Oh, despite being called sales people, they are only marketing?

antoobrien

Fratton Fred wrote: »

And Google UK buy services from Google Ireland, mark them up and sell them to companies in the UK, no? The advertising is on behalf of UK companies, targeting UK markets and managed by Google in the UK, except according to Google, it isn't.

No google in Ireland provide services across Europe from Ireland, the same way as paddypower provide services across Europe from the Isle of Man. Those services are not sold to the UK or French etc entities, they are sold to the customers in those countries.

Many software companies have "manufacturing" facilities here so that when they ship software (i.e. disks) it is shipped from the Irish (often EMEA) entity, rather that he local one. There's a reason why amazon, MS etc have big data centres here.

TheVman

I have been living in France for nearly ten years and I have to admit (eventhough i love EIRE) that this tax avoidance, social dumping nonsense is going to turn Ireland into a despised country, both its people and as a country to the detriment to tourism etc etc
It has been basically ****ing the rest of Europe on this issue for years and all that for a few thousand jobs in manafacturing and assembly...
This will not be allowed to continue and it should not be allowed...
This corporate tax issue is going to have disastrous effects on Ireland sonner or later.

I recommend reading : http://www.independent.ie/opinion/analysis/no-wonder-the-neighbours-are-upset-over-our-cosy-tax-policies-29276553.html

Duggys Housemate

TheVman wrote: »

I have been living in France for nearly ten years and I have to admit (eventhough i love EIRE) that this tax avoidance, social dumping nonsense is going to turn Ireland into a despised country, both its people and as a country to the detriment to tourism etc etc
It has been basically ****ing the rest of Europe on this issue for years and all that for a few thousand jobs in manafacturing and assembly...
This will not be allowed to continue and it should not be allowed...
This corporate tax issue is going to have disastrous effects on Ireland sonner or later.

I recommend reading : http://www.independent.ie/opinion/analysis/no-wonder-the-neighbours-are-upset-over-our-cosy-tax-policies-29276553.html

More nonsense. Ireland is a country with a lower tax take than some others, it is NOT A TAX HAVEN.

Fratton Fred

antoobrien wrote: »

No google in Ireland provide services across Europe from Ireland, the same way as paddypower provide services across Europe from the Isle of Man. Those services are not sold to the UK or French etc entities, they are sold to the customers in those countries.

Many software companies have "manufacturing" facilities here so that when they ship software (i.e. disks) it is shipped from the Irish (often EMEA) entity, rather that he local one. There's a reason why amazon, MS etc have big data centres here.

Do Tesco pay tax in Ireland? If they started importing all their produce, then they wouldn't have to, right?

antoobrien

TheVman wrote: »

It has been basically ****ing the rest of Europe on this issue for years

Actually Ireland is not the problem, at least with google (see this article for an idea of how it's perfectly legal to do what they are doing), it's the Dutch laws.

In short Ireland have tax laws that mean it is expensive for companies to send money outside, the Dutch do not. So the reason that google et al pay damn all EU tax is not Irish corporation tax rates, it's even more generous Dutch taxes.

Duggys Housemate

Fratton Fred wrote: »

Do Tesco pay tax in Ireland? If they started importing all their produce, then they wouldn't have to, right?

They pay taxes as they have a retail presence here. I explained this already. I even used a normal retail example - cf cadburys. What they sell is produce in retail located here, what Google sells is server space in Ireland.

Heres a question for you.

I use 4OD here in Ireland.
It has advertising.
Some of the advertising is Irish - Irish accents etc.
Where do they pay taxes on that income - note that all content and IP is in Britain.

I watch Sky here in Ireland.
It has advertising.
Some of the advertising is Irish - Irish accents etc.
Where do they pay taxes on that income - note that all content and IP is produced in Britain.


And the answer to both, is Britain.

Can you see why?

antoobrien

Fratton Fred wrote: »

Do Tesco pay tax in Ireland? If they started importing all their produce, then they wouldn't have to, right?

The difference between Tesco and say MS or Oracle is that in the republic of Ireland one does not buy foods off Tesco UK and they use local suppliers e.g. Kerry Group etc. The profits after tax are sent to Tesco (UK) as the parent company of Tesco (Ireland*). When you buy of MS, Oracle or Google, you are buying of the entity based in Dublin.

The local model is not how many of the tech firms operate, which is the sticking point for most people on how so many sales are made through Ireland.

*Not sure of the exact legal entities involved, could be Tesco ROI & Worldwide etc.

Duggys Housemate

antoobrien wrote: »

Actually Ireland is not the problem, at least with google (see this article for an idea of how it's perfectly legal to do what they are doing), it's the Dutch laws.

In short Ireland have tax laws that mean it is expensive for companies to send money outside, the Dutch do not. So the reason that google et al pay damn all EU tax is not Irish corporation tax rates, it's even more generous Dutch taxes.

Which means that the claim that they are here for the tax rate is a bit spurious, since they could be in Holland and avail of that rate directly.

In short Ireland could do well out of this panic.

Fratton Fred

antoobrien wrote: »

The difference between Tesco and say MS or Oracle is that in the republic of Ireland one does not buy foods off Tesco UK and they use local suppliers e.g. Kerry Group etc. The profits after tax are sent to Tesco (UK) as the parent company of Tesco (Ireland*). When you buy of MS, Oracle or Google, you are buying of the entity based in Dublin.

The local model is not how many of the tech firms operate, which is the sticking point for most people on how so many sales are made through Ireland.

*Not sure of the exact legal entities involved, could be Tesco ROI & Worldwide etc.

So, if Tesco Ireland ceases to exist, Tesco UK can supply all stores in Ireland through its warehouse in Newry and mot pay any tax?

maninasia

Duggys Housemate wrote: »

The investigation in the US has more moral merit, but no legal merit. The Americans are claiming that all moneys earned abroad by American headquartered companies should be repatriated after taxes are paid and immediately. At least there is some merit, as most of the Intellectual Property is created there. However whats sauce for the Goose is sauce for the Gander. American companies based in America but owned abroad should repatriate their profits abroad, and not re-invest there.

What the American government should or shouldn't decide will be up to them.
At the moment American individuals must pay tax on income generated outside of the US.

Why do corporations get a free pass on this?

There is no real logic in tax laws if you look at it from the outside.

Duggys Housemate

Fratton Fred wrote: »

So, if Tesco Ireland ceases to exist, Tesco UK can supply all stores in Ireland through its warehouse in Newry and mot pay any tax?

Christ we explained this remedially.

A retail presence is taxed on its profits. A wholesaler sells to its retail arm at wholesale prices. Tesco is not the wholesaler, the wholesaler is Kelloggs etc.

If however people in the Republic were to order something from Newry via Tesco online it would be taxed in the UK. In fact that works with anything I order from the UK.

Do you really not understand this?

Duggys Housemate

maninasia wrote: »

What the American government should or shouldn't decide will be up to them.
At the moment American individuals must pay tax on income generated outside of the US.

Why do corporations get a free pass on this?

There is no real logic in tax laws if you look at it from the outside.

The same laws apply to both, you can exclude taxation in the country you live in if there is a double taxation law with that country. Apple etc. are avoiding sending money back to the US because then they pay <the american rate> minus <the European rate> which as we have seen is 0%.

But you have to send it back to be taxed.

If Congress got too uppity about this companies would just make Ireland their global headquarters.

Fratton Fred

Duggys Housemate wrote: »

They pay taxes as they have a retail presence here. I explained this already. I even used a normal retail example - cf cadburys. What they sell is produce in retail located here, what Google sells is server space in Ireland.

Heres a question for you.

I use 4OD here in Ireland.
It has advertising.
Some of the advertising is Irish - Irish accents etc.
Where do they pay taxes on that income - note that all content and IP is in Britain.

I watch Sky here in Ireland.
It has advertising.
Some of the advertising is Irish - Irish accents etc.
Where do they pay taxes on that income - note that all content and IP is produced in Britain.


And the answer to both, is Britain.

Can you see why?

isn't about where the server is, it is where the sale is transacted. Otherwise why not just build a data centre in Bermuda? Google claim they don't have a retail presence in the UK, yet they employ hundreds of sales people.

it is blatant tax avoidance which the Irish tax rules facilitate. Unfortunately Ireland can do nothing about it.

seamus

maninasia wrote: »

Why do corporations get a free pass on this?

Because corporations don't have citizenship.

I think the more valid question is why US citizens have to pay tax on income outside of the US regardless of where they live. It's taxing someone based on an incident of birth and is exceptionally unfair.

isn't about where the server is, it is where the sale is transacted. Otherwise why not just build a data centre in Bermuda? Google claim they don't have a retail presence in the UK, yet they employ hundreds of sales people.

Because Bermuda isn't part of the EU and the transaction would subject to different taxation rules.

Traditional transaction taxation is unable to keep up with modern developments. What Google are doing is the same as having a call centre in the UK which talks to the clients, but then the clients ring a separate call centre in Ireland and make the transaction with an Irish company. The transaction is not taking place in the UK even though the pre-sales are.

If countries are sore about this, then they need to come up with new taxation models which don't try to apply the archaic taxation regimes on modern business models. Companies will continue to run rings around these models no matter what they do.

Duggys Housemate

Fratton Fred wrote: »

isn't about where the server is, it is where the sale is transacted. Otherwise why not just build a data centre in Bermuda? Google claim they don't have a retail presence in the UK, yet they employ hundreds of sales people.

it is blatant tax avoidance which the Irish tax rules facilitate. Unfortunately Ireland can do nothing about it.

No. YOu are confusing two issues.

1) Google not paying tax in Ireland - but sending it to Bermuda via Holland.
2) The UK claim that corporation tax is made on sales where the customer is. It isn't.

Google can employ who they want in the UK, I am sure that 40d and Sky have representatives over here when they sell advertising to Irish customers. Its where the sales are finally credited to - Sky UK, or Google IReland - which counts.

In any case even if Google were charged on their sales in the UK via UK representatives, it would make little difference. Mostly people compete for keywords online, I was amazed that they needed to sell this stuff to anybody, wouldn't people know?

maninasia

Duggys Housemate wrote: »

The same laws apply to both, you can exclude taxation in the country you live in if there is a double taxation law with that country. Apple etc. are avoiding sending money back to the US because then they pay <the american rate> minus <the European rate> which as we have seen is 0%.

But you have to send it back to be taxed.

If Congress got too uppity about this companies would just make Ireland their global headquarters.

I recall that corporations are treated as individuals under US law.

However I understand that American individuals have limits whereby they don't have to pay tax on overseas earnings, something like anything less than 80,000 USD as long as they file a report every year.

How do corporations get away with paying no tax on overseas income if they are earning billions in income globally?

Duggys Housemate

maninasia wrote: »

I recall that corporations are treated as individuals under US law.

However I understand that American individuals have limits whereby they don't have to pay tax on overseas earnings, something like anything less than 80,000 USD as long as they file a report every year.

How do corporations get away with paying no tax on overseas income if they are earning billions in income globally?

Both have double taxation agreements. Americans living here don't have to pay tax there if they are taxed here regardless of the rate here. *

Same with corporations except corporations have to pay the difference when they repatriate. Which is a form of double taxation.


* and in most countries you don't have to make any returns if you don't live in your country of birth/citizenship. American citizenship is like a branding.

maninasia

seamus wrote: »

Because corporations don't have citizenship.

I think the more valid question is why US citizens have to pay tax on income outside of the US regardless of where they live. It's taxing someone based on an incident of birth and is exceptionally unfair.

Because Bermuda isn't part of the EU and the transaction would subject to different taxation rules.

Traditional transaction taxation is unable to keep up with modern developments. What Google are doing is the same as having a call centre in the UK which talks to the clients, but then the clients ring a separate call centre in Ireland and make the transaction with an Irish company. The transaction is not taking place in the UK even though the pre-sales are.

If countries are sore about this, then they need to come up with new taxation models which don't try to apply the archaic taxation regimes on modern business models. Companies will continue to run rings around these models no matter what they do.

There is a taxation concept called Minimum Taxation whereby corporations could be forced to pay a minimum percentage of earnings or wealth every year.

http://www.afaanz.org/openconf/2009/modules/request.php?module=oc_program&action=view.php&id=51

The concepts can be categorized with respect to the tax object they are linked to.
Thus minimum taxation can be linked to income (Germany, Austria, Brazil, France,
Poland and USA) and to wealth. Further, the wealth tax is a widespread second-best
tool to prevent tax evasion (e.g. Luxembourg, Switzerland, France, Spain and
Norway). It rarely emerges as a form of minimum taxation. The Netherlands
operates an example of such a non-profit oriented minimum (wealth) tax that goes
by the name of “presumptive capital income tax”.1

draiochtanois

This post has been deleted.

gallag

The we ants arguing about the mega corps billions, our countries need to work together to get more back from these companies who make billions of us. If every county had a fair standardised corp tax we would all be better of, so what if it makes some companies pull out if the revenue from the remaining ones is many times higher. If the company's paid the fair amount we would all have more money in our pockets, trade would increase between countries and the only negative would be a few billionaires bank accounts would grow slightly slower.

maninasia

Duggys Housemate wrote: »

Both have double taxation agreements. Americans living here don't have to pay tax there if they are taxed here regardless of the rate here. *

Same with corporations except corporations have to pay the difference when they repatriate. Which is a form of double taxation.


* and in most countries you don't have to make any returns if you don't live in your country of birth/citizenship. American citizenship is like a branding.

Many wealthy Asians are dropping their American citizenship like hot potatoes. The American govt has forced through data sharing of account and property registers in many Asian countries and it is getting harder for them to hide their money from Uncle Sam.

Fratton Fred

seamus wrote: »

Because corporations don't have citizenship.

I think the more valid question is why US citizens have to pay tax on income outside of the US regardless of where they live. It's taxing someone based on an incident of birth and is exceptionally unfair.

Because Bermuda isn't part of the EU and the transaction would subject to different taxation rules.

Traditional transaction taxation is unable to keep up with modern developments. What Google are doing is the same as having a call centre in the UK which talks to the clients, but then the clients ring a separate call centre in Ireland and make the transaction with an Irish company. The transaction is not taking place in the UK even though the pre-sales are.

If countries are sore about this, then they need to come up with new taxation models which don't try to apply the archaic taxation regimes on modern business models. Companies will continue to run rings around these models no matter what they do.

If you believe the Google line. If Tesco claimed their checkouts are operated from a server in Luxembourg and the store staff are all pre sales, would they get away with it?

The rules are old and they are archaic, which is why the G8 want to tighten them up..

creeper1

I think we all have to remember through this that the bad guys are the bankers.

Don't forget this for one second.

Corporations go bust if they don't produce something people want.

With banks it's heads we win and tails you lose.

They have upside and no downside.

Never put negative feelings towards the wrong place. The bankers are the real evil in society and the economy.

Duggys Housemate

gallag wrote: »

The we ants arguing about the mega corps billions, our countries need to work together to get more back from these companies who make billions of us. If every county had a fair standardised corp tax we would all be better of, so what if it makes some companies pull out if the revenue from the remaining ones is many times higher. If the company's paid the fair amount we would all have more money in our pockets, trade would increase between countries and the only negative would be a few billionaires bank accounts would grow slightly slower.

Utter rubbish. Corporation tax does not benefit, or harm, billionaires. Just the companies and shareholders - none are billionaires.

Duggys Housemate

Fratton Fred wrote: »

If you believe the Google line. If Tesco claimed their checkouts are operated from a server in Luxembourg and the store staff are all pre sales, would they get away with it?

The rules are old and they are archaic, which is why the G8 want to tighten them up..

No because the physical items being sold are in Tesco UK ( or Ireland).

Surely you are getting this? The item which Google sells is advertising. What brings people to a goole search page, is the content of that page. That is, the search results. Which are not in the UK. Nor is the IP owned by a UK company.

There can be no tightening up on this - there can be in the bermuda/holland taxation issue. But not on this. If you want this "fixed" then every country in the world would have to agree that any advertising ( or anything) sold via internet to a customer within its borders would be taxed to that country, meaning all companies with an internet presence would submit tax (And/or VAT )returns to all countries where the internet existed and generated a sale. App developers would make 100's of tax returns.



Never going to happen.

gallag

Duggys Housemate wrote: »

Utter rubbish. Corporation tax does not benefit, or harm, billionaires. Just the companies and shareholders - none are billionaires.

No companies share holders are billionaires? Lol.

Duggys Housemate

gallag wrote: »

No companies share holders are billionaires? Lol.

Did I say that? Most aren't. Most are pension funds and normal people. And corporation tax is only vaguely related to dividends, or other returns. Selling stock generates a tax of 15% int he US

gallag

Duggys Housemate wrote: »

Did I say that? Most aren't. Most are pension funds and normal people. And corporation tax is only vaguely related to dividends, or other returns. Selling stock generates a tax of 15% int he US

Yes you did say that. Are you saying the super rich do not benefit by low corp tax?

Duggys Housemate

gallag wrote: »

Yes you did say that. Are you saying the super rich do not benefit by low corp tax?

Yes I am. They do benefit from low dividend and capital gains tax which are taxes at 15% in the US.

who_me

Duggys Housemate wrote: »

The Dept. of Finance said that was incorrect. There are no negotiations with separate companies here. They pay 12.5% on what they declare.

And where do you think these companies owe taxes?

1) Here?
2) The UK where they have the audacity to sell stuff?
3) The US?

If you believe 3) then you can't believe 1).

( 2 is just rubbish).

Well, Tim Cook (Apple CEO) is testifying to a US Senate committee today, and repeated "Our companies pay the appropriate taxes in Ireland as per our agreement with the Irish government." If they're paying the standard rate, why would they need an agreement?

As for where they pay tax, I don't particularly care (bar the obvious "here please!"), but it should be consistent across jurisdictions to avoid cross-border tax loopholes. If you're following Cook's testimony, they're clearly taking advantage of ambiguity (whether unintentional or deliberate) in the wording of Irish tax law.

If we feel corporations should pay no tax than fine, let's enact that in law. But let's not have a situation where large successful corporations pay little or no tax while smaller, less successful business pay more. Apart from the fairness argument, that's just not practical.

gallag

Duggys Housemate wrote: »

Yes I am. They do benefit from low dividend and capital gains tax which are taxes at 15% in the US.

They sure do, they benefit from all low taxes, even a low corp tax.

Duggys Housemate

who_me wrote: »

Well, Tim Cook (Apple CEO) is testifying to a US Senate committee today, and repeated "Our companies pay the appropriate taxes in Ireland as per our agreement with the Irish government." If they're paying the standard rate, why would they need an agreement?

As for where they pay tax, I don't particularly care (bar the obvious "here please!"), but it should be consistent across jurisdictions to avoid cross-border tax loopholes. If you're following Cook's testimony, they're clearly taking advantage of ambiguity (whether unintentional or deliberate) in the wording of Irish tax law.

If we feel corporations should pay no tax than fine, let's enact that in law. But let's not have a situation where large successful corporations pay little or no tax while smaller, less successful business pay more. Apart from the fairness argument, that's just not practical.

Again there is no special agreement. The Business Insider link earlier demonstrated the issue.

Apple ( et Google et al) created management companies in bermuda. Where they file for tax.
This would be illegal, or penalized under Irish law so they divert through Holland where we have transfer agreements.
Holland doesn't penalize on this, so the revenue is transferred to Bermuda without penalty.

Arguably IReland is a victim here. But be clear - the UK isn't.

If Holland died it's law, and the UK fixed their off shore accounts, we would get that money. Which would be nice.

Fratton Fred

Duggys Housemate wrote: »

Again there is no special agreement. The Business Insider link earlier demonstrated the issue.

Apple ( et Google et al) created management companies in bermuda. Where they file for tax.
This would be illegal, or penalized under Irish law so they divert through Holland where we have transfer agreements.
Holland doesn't penalize on this, so the revenue is transferred to Bermuda without penalty.

Arguably IReland is a victim here. But be clear - the UK isn't.

If Holland died it's law, and the UK fixed their off shore accounts, we would get that money. Which would be nice.

If Ireland is irrelevant to all this, why are These companies here? The weather?

Duggys Housemate

Fratton Fred wrote: »

If Ireland is irrelevant to all this, why are These companies here? The weather?

In part. See data centres.

We've developed a large skillset - not just Irish but foreign born and English is the language of IT. Fact is they didn't move to holland to avail of its tax treaties with British colonial outposts. So can't be just tax.

hmmm

We're front page of the Financial Times and Wall Street Journal, and senior US politicians are lumping us in with the Cayman islands as a tax haven. We find out that Apple have a "special tax agreement" with Ireland that means they only pay 2% corporate tax, while we have spent the past few years pretending to the world we have a 12.5% tax rate. I'm not saying that it was wrong what we did, we needed the employment, but let's not pretend that we haven't screwed over taxpayers in the rest of the world.

Duggys Housemate

That 2% is unverified. It's possible Apple got that in the 80's but we stopped special casing companies years ago.

Bullseye1

You would think they would at least give us cheaper iPhones

PeadarCo

Fratton Fred wrote: »

If Ireland is irrelevant to all this, why are These companies here? The weather?

Actually the weather is one of the reasons. Our temperate climate isn't subject to large variations in temperature. The computers in data centres generate a lot of heat. Our climate is more cost efficient when it comes to things like the cost of air conditioning given the relatively low swings in temperature.

antoobrien

hmmm wrote: »

We find out that Apple have a "special tax agreement" with Ireland that means they only pay 2% corporate tax, while we have spent the past few years pretending to the world we have a 12.5% tax rate.

If the apple accounts are published that will likely be proved wrong. They all pay 12.5% on the profit booked here, something the US senators studiously ignored. It's how the profit is reduced by transfer pricing, something that has to be agreed with the SEC up front (google's arrangement was registered in 2003) that they should be focusing.

And Tim Cook told them to change their taxation scheme if they want to get "their" cash "home".

Edit: I wrote a piece about this in a different thread before, which has a link to the 2009 google financial accounts.

They made a profit of €47,415,556, piad CT of €5,926,945. That works out at 12.5%. They also paid other taxes of approx €12m.

The problem is that some idiot read the revenue figure 7.868bn without looking at the cost of sales 2.355bn or the administrative costs of 5.46bn to decide that google paid (incl transfer pricing agreement) to come up with an overall figure of 0.14% tax paid.

Scofflaw

hmmm wrote: »

We're front page of the Financial Times and Wall Street Journal, and senior US politicians are lumping us in with the Cayman islands as a tax haven. We find out that Apple have a "special tax agreement" with Ireland that means they only pay 2% corporate tax, while we have spent the past few years pretending to the world we have a 12.5% tax rate. I'm not saying that it was wrong what we did, we needed the employment, but let's not pretend that we haven't screwed over taxpayers in the rest of the world.

You can't have a special tax rate for a company, because tax rates in Ireland are set by statute. As antoobrien says, what's important - and extremely badly reported - is the profit, which depend in turn on transfer pricing rules.

cordially,
Scofflaw

If Britain is concerned about Google profits ending up in an overseas tax haven (in this case Bermuda) maybe they could influence their own overseas territories (Bermuda, Bahamas, British Virgin Islands) to close off loopholes on their side?

Duggys Housemate

[Deleted User] wrote: »

If Britain is concerned about Google profits ending up in an overseas tax haven (in this case Bermuda) maybe they could influence their own overseas territories (Bermuda, Bahamas, British Virgin Islands) to close off loopholes on their side?

Excellent point. Well made.

Fratton Fred

Deleted User wrote: »

If Britain is concerned about Google profits ending up in an overseas tax haven (in this case Bermuda) maybe they could influence their own overseas territories (Bermuda, Bahamas, British Virgin Islands) to close off loopholes on their side?

http://www.guardian.co.uk/politics/2013/may/20/cameron-offshore-tax-havens-transparency

David Cameron has written to the leaders of Britain's offshore tax havens stressing the need to "get our own houses in order" as he pushes for international action to tackle avoidance schemes.

In a message to 10 crown dependencies and British overseas territories Cameron said he backed their right to be low tax jurisdictions but insisted that rules needed to be set and enforced fairly.