Irish Property Market 2020 Part 2

PropQueries

awec wrote: »

Are you talking about when someone is sent to another country to work for period of time?

There are specific tax laws for this scenario, when you are temporarily posted to another country.

If you are talking about people employed by Google Ireland in sales, working permanently in another country, then this doesn't really happen. They would be employed by their local subsidiary.

Thanks. That makes sense. So most large companies can get around this potential tax liability by simply setting up a subsidiary in another EU country?

Given that Google and similar type companies most likely already have those set up or can set them up relatively easily, would that mean they could easily allow their EU employees currently working in Dublin to work from their home country without any potential tax consequences?

I'm not bringing up the whole debate on whether Ireland will lose employees through this avenue, but if it's that easy and once the company agrees, it appears to not be a barrier to employees working in their home country within the EU should they choose to and should their employer agree to such a request?

jesus_thats_gre

If a Google Ireland employee is physically resident in Austria, I am 99% certain they will pay income tax etc in Austria. And regardless of whether Google have a subsidiary there or not.

Or am I missing something?

Timing belt

PropQueries wrote: »

Thanks. That makes sense. So most large companies can get around this potential tax liability by simply setting up a subsidiary in another EU country?

Given that Google and similar type companies most likely already have those set up or can set them up relatively easily, would that mean they could easily allow their EU employees currently working in Dublin to work from their home country without any potential tax consequences?

I'm not bringing up the whole debate on whether Ireland will lose employees through this avenue, but if it's that easy and once the company agrees, it appears to not be a barrier to employees working in their home country within the EU should they choose to and should their employer agree to such a request?

Yes they can set up a subsidiary and they can work for that subsidiary but they can't carry out work for the Irish company and be paid by a subsidiary.

They would need to undertake the work for the subsidiary and then they would need to put in place a transfer pricing policy. This has been done for years where companies outsource work to India, Eastern Europe etc.

Timing belt

jesus_thats_gre wrote: »

If a Google Ireland employee is physically resident in Austria, I am 99% certain they will pay income tax etc in Austria. And regardless of whether Google have a subsidiary there or not.

Or am I missing something?

It's not about the tax of the employee but the corporation tax of the company.

Yes there are consequence's for the employees personal tax but that is not the main driver

awec

PropQueries wrote: »

Thanks. That makes sense. So most large companies can get around this potential tax liability by simply setting up a subsidiary in another EU country?

Given that Google and similar type companies most likely already have those set up or can set them up relatively easily, would that mean they could easily allow their EU employees currently working in Dublin to work from their home country without any potential tax consequences?

I'm not bringing up the whole debate on whether Ireland will lose employees through this avenue, but if it's that easy and once the company agrees, it appears to not be a barrier to employees working in their home country within the EU should they choose to and should their employer agree to such a request?

Most large companies, at least the ones the size of Google, will already have numerous subsidiaries all around the world. Transferring between subsidiaries is easy, it happens all the time in these big companies any time anyone transfers to a new job internally that's in a different location. It pretty much always involves physically relocating.

If you want to live in a country where there is no local presence (this is not likely for someone as big as Google, who likely have a presence in every european state, but would definitely be true for many smaller multinationals) then it gets a bit more complicated as you working there exposes the company to the law of wherever that is.

Transferring to another subsidiary, and wanting to do the same job (i.e. working remotely) it becomes more complicated. For example you mentioned R+D before, Ireland has generous R+D grants, but you can only claim it on work done in Ireland. When you're going to revenue for your R+D money you need to provide details on every employee who contributed.

Timing belt

thefridge2006 wrote: »

AIB to cut a string of deposit rates to zero and impose negative rates on more firms

https://www.independent.ie/business/personal-finance/banking/aib-to-cut-a-string-of-deposit-rates-to-zero-and-impose-negative-rates-on-more-firms-39614046.html


Where are we headed ????

This has been in the pipeline for a long time as since the ECB turned rates negative the banks are not making money. All that is happening is that they are passing on this cost to the customers. They have not previously passed on rates to small companies and individuals. The whole purpose of the negative rates are to get people spending and boost the economy.

hometruths

OwlsZat wrote: »

This does make sense. A few of the PLC home builders have already said they are going to focus more on the first time buyers part of the market as this is where there is most money to be made.

Makes perfect sense to concentrate on selling to the last few remaining FTBers now while they are still in Dublin.

If they wait a couple of years, all the young buyers will be WFHing in the sticks.

Cyrus

PropQueries wrote: »

Thanks. That makes sense. So most large companies can get around this potential tax liability by simply setting up a subsidiary in another EU country?

Given that Google and similar type companies most likely already have those set up or can set them up relatively easily, would that mean they could easily allow their EU employees currently working in Dublin to work from their home country without any potential tax consequences?

I'm not bringing up the whole debate on whether Ireland will lose employees through this avenue, but if it's that easy and once the company agrees, it appears to not be a barrier to employees working in their home country within the EU should they choose to and should their employer agree to such a request?

Sure and then the employee needs to work in that jurisdiction on the pay rates that apply there , suddenly it’s of less interest

TheSheriff

thefridge2006 wrote: »

AIB to cut a string of deposit rates to zero and impose negative rates on more firms

https://www.independent.ie/business/personal-finance/banking/aib-to-cut-a-string-of-deposit-rates-to-zero-and-impose-negative-rates-on-more-firms-39614046.html


Where are we headed ????

Hopefully not towards negative rates on large personal desposits, it'll add more fuel to the property fire.

Timing belt

TheSheriff wrote: »

Hopefully not towards negative rates on large personal desposits, it'll add more fuel to the property fire.

https://www.irishtimes.com/business/financial-services/aib-considers-charging-wealthy-customers-for-holding-their-money-1.4373777

wassie

thefridge2006 wrote: »

AIB to cut a string of deposit rates to zero and impose negative rates on more firms

https://www.independent.ie/business/personal-finance/banking/aib-to-cut-a-string-of-deposit-rates-to-zero-and-impose-negative-rates-on-more-firms-39614046.html

Where are we headed ????

Not very far from where we were.

Going from the 0.01% less 37% DIRT currently I am earning in my on-demand account to zero wont exactly have people taking to the streets in outrage.

PropQueries

Cyrus wrote: »

Sure and then the employee needs to work in that jurisdiction on the pay rates that apply there , suddenly it’s of less interest

Pay is relative to the cost of living. If someone is working for Google, many may well decide to move home to e.g. Poland, even for a 20%-30% paycut. They would still most likely be better off in real terms.

Plus the higher tax rate kicks in here at a much lower threshold than most other countries.

But, as another poster stated here, most companies are more concerned about the impact on their corporate taxes. But they may find a way around that if they get their tax lawyers on it

Timing belt

PropQueries wrote: »

Pay is relative to the cost of living. If someone is working for Google, many may well decide to move home to e.g. Poland, even for a 20%-30% paycut. They would still most likely be better off in real terms.

Plus the higher tax rate kicks in here at a much lower threshold than most other countries.

But, as another poster stated here, most companies are more concerned about the impact on their corporate taxes. But they may find a way around that if they get their tax lawyers on it

There has never been anything stopping any Irish company (Except a regulated firm that needs to approval first by the central bank) from outsourcing work to a a low cost jurisdiction. They have choose not to do it as it is not always cheaper or more efficient. There is noting new here so I don't know why you think there will be a flood of people leaving causing a housing crash. It is up there with your theory that Funds owned all the vacant properties in Ireland which I disproved on the other thread. You seem very determined to use any bit of information or data to say a housing crash is coming.

OwlsZat

https://amp.independent.ie/business/commercial-property/will-budget-2021-finally-address-the-housing-market-crisis-failures-39599386.html

To quote Architect Mel Reynolds, an expert in housing policy, "the State is the biggest vulture fund in the country". Also one in 4 new tennants is avaiing of HAP!

Janey mac, some mind-melting statistics. Didn't realise it was this bad. No wonder the PLCs want to target "First time buyers". More like cheap housing the state will buy loads off us at silly prices.

Cyrus

PropQueries wrote: »

Pay is relative to the cost of living. If someone is working for Google, many may well decide to move home to e.g. Poland, even for a 20%-30% paycut. They would still most likely be better off in real terms.

Plus the higher tax rate kicks in here at a much lower threshold than most other countries.

But, as another poster stated here, most companies are more concerned about the impact on their corporate taxes. But they may find a way around that if they get their tax lawyers on it

I’d argue if that was the case they would have moved already, why do so many non nationals work for mncs here rather than home ? Pay.

Earning an Irish wage and buying a polish house is far advantageous than earning a polish wage , but as I said it’s not actually an option in reality so it’s a moot point.

It’s not some new issue companies have been dealing with issues of permanent establishment from more aggressive tax jurisdictions for years .

OwlsZat

https://amp.independent.ie/life/home-garden/homes/home-truths-architects-seek-tax-tweak-for-apartments-to-help-solve-crisis-39602349.html

The indo continues to write articles reflective of the actual situation. "But Dublin is a city falling down with empty crumbling buildings, shops with empty overhead floors and infill sites which actually cannot be developed to provide affordable homes."

The architects explain to Government why the current taxation system for apartments doesn't work. I fully expect it to be totally ignored.

TheSheriff

Timing belt wrote: »

https://www.irishtimes.com/business/financial-services/aib-considers-charging-wealthy-customers-for-holding-their-money-1.4373777

I know this topic was discussed a few weeks back, but I missed that article thanks.

I think property would be one potential hedge against this for said high net worth individuals if it ever comes to pass. Long way off tough id say as people would initially just change banks I assume.

Timing belt

TheSheriff wrote: »

I know this topic was discussed a few weeks back, but I missed that article thanks.

I think property would be one potential hedge against this for said high net worth individuals if it ever comes to pass. Long way off tough id say as people would initially just change banks I assume.

Once one banks introduce it the others will follow within days otherwise they see an increase in deposits which will result in an increase in cost.

PropQueries

Cyrus wrote: »

I’d argue if that was the case they would have moved already, why do so many non nationals work for mncs here rather than home ? Pay.

Earning an Irish wage and buying a polish house is far advantageous than earning a polish wage , but as I said it’s not actually an option in reality so it’s a moot point.

It’s not some new issue companies have been dealing with issues of permanent establishment from more aggressive tax jurisdictions for years .

You're right. Absolutely nothing regarding the potential of WFH has changed in the past 6 months.

Cyrus

PropQueries wrote: »

You're right. Absolutely nothing regarding the potential of WFH has changed in the past 6 months.

Oh ffs it’s a waste of time posting in response to you it’s even more grating now that you are getting snide .

The point is you can’t work from home and get paid an Irish salary if home isn’t in Ireland , understood ?

PropQueries

Cyrus wrote: »

Oh ffs it’s a waste of time posting in response to you it’s even more grating now that you are getting snide .

The point is you can’t work from home and get paid an Irish salary if home isn’t in Ireland , understood ?

I had already made that point at the very beginning. I had said "Pay is relative to the cost of living. If someone is working for Google, many may well decide to move home to e.g. Poland, even for a 20%-30% paycut. They would still most likely be better off in real terms. Plus the higher tax rate kicks in here at a much lower threshold than most other countries."

Cyrus

PropQueries wrote: »

I had already made that point at the very beginning. I had said "Pay is relative to the cost of living. If someone is working for Google, many may well decide to move home to e.g. Poland, even for a 20%-30% paycut. They would still most likely be better off in real terms. Plus the higher tax rate kicks in here at a much lower threshold than most other countries."

Why were they here in the first place then ? Given as you say most large tech cos have operations in these countries already

Hubertj

PropQueries wrote: »

I had already made that point at the very beginning. I had said "Pay is relative to the cost of living. If someone is working for Google, many may well decide to move home to e.g. Poland, even for a 20%-30% paycut. They would still most likely be better off in real terms. Plus the higher tax rate kicks in here at a much lower threshold than most other countries."

It’s difficult to have this conversation and explain it to you. You’re pretending not to understand in order to wind people up. You really haven’t a clue what you’re talking about and this isn’t the correct forum to school you on how MNCs, business units, transfer pricing, service revenue, project revenue is apportioned. Added to that there are home (IRS) and local (revenue in Ireland) tax authorities requirements around materiality. Jog on.
Also to stop the incessant copy and paste of the same articles I will check out that poxy overpriced development on lansdowne road tomorrow and report back if there are many workers on site.

PropQueries

Cyrus wrote: »

Why were they here in the first place then ? Given as you say most large tech cos have operations in these countries already

We all know they are here for tax reasons. Otherwise they would have set up in the UK on day one. Google employs almost as many people across other EU countries in R&D as they do in total in Ireland.

The conversation started off by someone posting an article that the multinationals must move people back here for tax reasons. I agreed that, if true, it was probably reasonable.

Then, that same person advocating the point that they will most likely have to move people back here due to the tax implications on their companies swiftly reversed opinion and said even if those employees stayed in their home countries, it most likely would have no tax implications. I took them at their word on both their original argument and then again on their swift reversal of their original argument.

Then you came along and said if WFH was so advantageous, the multinationals would have being doing it all along so WFH will probably have no impact of where employees work going forward.

I countered that a lot has changed in relation to the potential of WFH over the past 6 months and it could have significant implications for where people work if the original poster is correct in his assumption that there are likely no tax implications for a company if their employees work here or in some other EU country.

That's basically the current argument summed up.

PropQueries

Hubertj wrote: »

It’s difficult to have this conversation and explain it to you. You’re pretending not to understand in order to wind people up. You really haven’t a clue what you’re talking about and this isn’t the correct forum to school you on how MNCs, business units, transfer pricing, service revenue, project revenue is apportioned. Added to that there are home (IRS) and local (revenue in Ireland) tax authorities requirements around materiality. Jog on.
Also to stop the incessant copy and paste of the same articles I will check out that poxy overpriced development on lansdowne road tomorrow and report back if there are many workers on site.

I know there are workers on site. The debate was on if they were purposely slowing down completion due to not being much interest and being unable to sell their apartments. They've been on site for over 4 years.

Cyrus

PropQueries wrote: »

We all know they are here for tax reasons. Otherwise they would have set up in the UK on day one. Google employs almost as many people across other EU countries in R&D as they do in total in Ireland.

The conversation started off by someone posting an article that the multinationals must move people back here for tax reasons. I agreed that, if true, it was probably reasonable.

Then, that same person advocating the point that they will most likely have to move people back here due to the tax implications on their companies swiftly reversed opinion and said even if those employees stayed in their home countries, it most likely would have no tax implications. I took them at their word on both their original argument and then again on their swift reversal of their original argument.

Then you came along and said if WFH was so advantageous, the multinationals would have being doing it all along so WFH will probably have no impact of where employees work going forward.

I countered that a lot has changed in relation to the potential of WFH over the past 6 months and it could have significant implications for where people work if the original poster is correct in his assumption that there are likely no tax implications for a company if their employees work here or in some other EU country.

That's basically the current argument summed up.

When I say why are they are I mean the workers not the companies , you are talking about them going home , why are they here in the first place.

If an employee of an Irish company isn’t in Ireland it’s an issue, if they are employed by another legal entity in another jurisdiction then that’s fine but they will be paid accordingly, you say they will be better off, begs the question why they came to Ireland then.

Hubertj

schmittel wrote: »

Makes perfect sense to concentrate on selling to the last few remaining FTBers now while they are still in Dublin.

If they wait a couple of years, all the young buyers will be WFHing in the sticks.

They’re gone already. Every single 1 of them has gone to Leitrim. They bought up all the vacant properties. Dublin is now like Detroit. Starbucks will be the next to go.

HotDudeLife

schmittel wrote: »

Makes perfect sense to concentrate on selling to the last few remaining FTBers now while they are still in Dublin.

If they wait a couple of years, all the young buyers will be WFHing in the sticks.

Agreed, very few fools left though i would imagine. Many people thinking of selling and cashing out at the top appear to have just missed the boat.

Hubertj

HotDudeLife wrote: »

Agreed, very few fools left though i would imagine. Many people thinking of selling and cashing out at the top appear to have just missed the boat.

I don’t think it’s very fair to call someone a fool if they chose to purchase a house or apartment.

L1011

Starbucks the American firm left 8 years ago - they're all Irish owned franchises now.