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Is a minimum international level of corporation tax a threat to Ireland?

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  • Posts: 3,801 ✭✭✭[Deleted User]


    haphaphap wrote: »
    Most Germans under the age of 50 in the BRD States have excellent English. They would be on a level similar to that of the Swedes or Dutch.

    That’s a fantasy. I’ve met younger people with no English there and to live there and understand signage, train announcements, official documentation, officials themselves, needs the language.

    A lot of Holland is dual language, Germany isn’t.


  • Posts: 3,801 ✭✭✭[Deleted User]


    Dell jumped ship for a few million in Polish grants , Fruit of the Loom pulled out for a few cents an hour and took millions worth of equipment paid for by Irish state with them,

    Those aren’t software companies. Software companies need to pay high wages to get people to move. The gross profit is extremely large so successful companies can afford it.


  • Posts: 3,801 ✭✭✭[Deleted User]


    pixelburp wrote: »
    Cribbing about the weather betrays an axe being ground that doesn't pertain to the notion of taxation or economy. A strong bias that the poster is simply projecting their obvious jealousy our European neighbours have better weather. Faraway hills.

    And if we ARE talking weather, our climate is apparently better for maintaining data centres, an industry increasingly important in our cloud based world, so it's swings and roundabouts stuff. I get it, the Irish hate their own weather, we're obsessed and more than a little bitter about it(seriously, talking to Americans they boggle at how much it influences our conversation topics).

    Ask anybody from most of India living in Ireland about the weather. They love it.


  • Registered Users Posts: 23,370 ✭✭✭✭Kermit.de.frog


    If Dublin is to be attractive with these changes we seriously need to up our game.

    For example, one of the biggest issues I have with Dublin is the mediocrity and conservatism of the place.

    The idea that you can't build more than six floors for example and treating the place like some Florence style museum piece has to go. It's anything but. We need proper transport systems and we need greater emphasise on our public realms.

    These attitudes cost us homes and jobs and need to change.

    It's the same for all cities/towns were multinationals may locate.

    We need more ambition to attract quality jobs here. It has to be somewhere people both want to and can live in.

    We also need to support indigenous industries.

    Dublin right now is not an attractive enough proposition. We have seen in recent days the coming to the surface of the anti social issues that have been building for years as well.

    There needs to be focus on so many things that have been ignored too long because all of these things are basic quality of life issues that will swing the dial one way or another when it comes to investment.


  • Registered Users Posts: 2,267 ✭✭✭fash


    NIMAN wrote: »
    But how much do Facebook, Google, Twitter etc care about the weather? Or beaches?
    They don't, but their workers would. Happier, more flexible and available workers (because of accommodation, transport) who can readily afford to work for less.


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  • Registered Users Posts: 2,267 ✭✭✭fash


    pixelburp wrote: »
    Cribbing about the weather betrays an axe being ground that doesn't pertain to the notion of taxation or economy. A strong bias that the poster is simply projecting their obvious jealousy our European neighbours have better weather. Faraway hills.

    And if we ARE talking weather, our climate is apparently better for maintaining data centres, an industry increasingly important in our cloud based world, so it's swings and roundabouts stuff. I get it, the Irish hate their own weather, we're obsessed and more than a little bitter about it(seriously, talking to Americans they boggle at how much it influences our conversation topics).
    It's not just "weather" though is it ? (Although I've had discussions with many southern Europeans for whom it puts a hard upper limit on the amount of time they could spend in Ireland). It's accommodation and public infrastructure- so you can live cheaply in a pleasant apartment and travel to work and leisure without a car, the public services for your money etc - the entire quality of life - of which "weather" is a factor.


  • Registered Users Posts: 710 ✭✭✭tjhook


    Apologies, I don't know as much about this topic as many others do. But I gather the two main measures are (1) minimum corporate tax rate and (2) corporate taxes being paid where sales are made rather than where the company is based.

    It seems the second item above is the bigger threat to Ireland. But does it partly work in our favour? I.e. sales of foreign goods in Ireland will mean corporate taxes being diverted to Ireland from whatever country their company HQ is based?

    The most obvious example is cars - we don't make any in Ireland. Will Volkswagen etc have to start paying corporate tax in Ireland rather than Germany for cars sold here?


  • Registered Users Posts: 12,858 ✭✭✭✭hotmail.com


    America has screwed Ireland over with this policy.


  • Posts: 3,801 ✭✭✭[Deleted User]


    fash wrote: »
    It's not just "weather" though is it ? (Although I've had discussions with many southern Europeans for whom it puts a hard upper limit on the amount of time they could spend in Ireland). It's accommodation and public infrastructure- so you can live cheaply in a pleasant apartment and travel to work and leisure without a car, the public services for your money etc - the entire quality of life - of which "weather" is a factor.

    By and large well paid IT workers live along the areas where the transport is ok. Or they can wfh a lot.

    Not much we can do about the weather but Dublin isn’t worse than Paris. Or Northern Europe in general. And summer time in Madrid isn’t a picnic for Northern Europeans either.

    Where are these imaginary beach cities with big IT jobs? Dublin actually does have beaches.


  • Registered Users Posts: 6,191 ✭✭✭RandomViewer


    tjhook wrote: »
    Apologies, I don't know as much about this topic as many others do. But I gather the two main measures are (1) minimum corporate tax rate and (2) corporate taxes being paid where sales are made rather than where the company is based.

    It seems the second item above is the bigger threat to Ireland. But does it partly work in our favour? I.e. sales of foreign goods in Ireland will mean corporate taxes being diverted to Ireland from whatever country their company HQ is based?

    The most obvious example is cars - we don't make any in Ireland. Will Volkswagen etc have to start paying corporate tax in Ireland rather than Germany for cars sold here?

    VW distributors Ireland would already be paying that tax, Car makers sell through agents Google doesnt


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  • Registered Users Posts: 6,191 ✭✭✭RandomViewer


    America has screwed Ireland over with this policy.

    Do you think America give a toss?


  • Posts: 3,801 ✭✭✭[Deleted User]


    VW distributors Ireland would already be paying that tax, Car makers sell through agents Google doesnt

    You’re confusing corporate tax with VAT or sales tax.


  • Registered Users Posts: 32,136 ✭✭✭✭is_that_so


    America has screwed Ireland over with this policy.
    It will work out better for everyone if big tech and other companies cannot hide these huge sums untaxed as they please. The level is relatively low and so raises the possibility of a lot of countries signing up to it. From our perspective yes it is a likely loss of tax but one would assume there would be strong resistance to anything higher than 15%.


  • Registered Users Posts: 6,191 ✭✭✭RandomViewer


    There seems to be a notion that all the staff in MNCs are on huge money, this isn't the case, a lot would be on very average to low incomes,


  • Registered Users Posts: 23,370 ✭✭✭✭Kermit.de.frog


    is_that_so wrote: »
    It will work out better for everyone if big tech and other companies cannot hide these huge sums untaxed as they please. The level is relatively low and so raises the possibility of a lot of countries signing up to it. From our perspective yes it is a likely loss of tax but one would assume there would be strong resistance to anything higher than 15%.

    It's a highly likely loss of jobs as well.

    While some investments already committed will remain because it's not worth the agro moving the real damage will be in jobs not coming here in the future.

    It has to be repeated why would they?

    With these changes there is no reason for US companies any longer to have key operations outside of the United States.

    This applies to everywhere, not just Ireland.


  • Posts: 3,801 ✭✭✭[Deleted User]


    It's a highly likely loss of jobs as well.

    While some investments already committed will remain because it's not worth the agro moving the real damage will be in jobs not coming here.

    It has to be repeated why would they?

    With these changes there is no reason for US companies any longer to have key operations outside of the United States.

    This applies to everywhere, not just Ireland.

    That’s the real threat. American multinationals moving to Austin and not Dublin. Within Europe Dublin remains a sane choice.


  • Registered Users Posts: 976 ✭✭✭greenfield21


    America has screwed Ireland over with this policy.

    Both biden and yellen have added the momentum to this issue now but it seemed inevitable anyway... Also the pandemic hasn't helped either with every country looking to find funds for expenditure and rebuild. Profitable MNCs were always going to be a target... A very bad time for ireland. We also knew it was coming if anyone looked at bidens policies early last year.


  • Registered Users Posts: 32,136 ✭✭✭✭is_that_so


    It's a highly likely loss of jobs as well.

    While some investments already committed will remain because it's not worth the agro moving the real damage will be in jobs not coming here.

    It has to be repeated why would they?

    With these changes there is no reason for US companies any longer to have key operations outside of the United States.

    This applies to everywhere, not just Ireland.
    It may or it may not. Some would argue that we are now growing and developing our own tech industries a lot faster. It's not easy to up sticks and some of them have been here years. It's also a whole lot more than just having operations in the US and there are massive advantages to being in a country where they can service one of largest trade blocks in the world.


  • Registered Users Posts: 2,267 ✭✭✭fash


    Where are these imaginary beach cities with big IT jobs? Dublin actually does have beaches.
    Currently? In California.
    Once tax becomes equalized? Could well be Lisbon, Malaga, Barcelona, Trieste etc.


  • Registered Users Posts: 118 ✭✭Chacha97


    I believe that there is a big need for Ireland to produce their own technology companies. We can't simply rely on these large foreign tech companies imo.
    A lot of the work done here is quite administrative I feel, I could be totally wrong.
    I've seen in my own work, granted nothing to the size of these hundreds of billions market capped companies but none the less they are outsourcing the software jobs to Eastern Europe and paying them for specific tasks rather than being tied for a salary.

    In the point of English speaking, when I was Germany on exchange (secondary) it was quite telling that all of them could speak good English. Even the less bright in the classes could speak english to a quite good standard.


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  • Registered Users Posts: 23,370 ✭✭✭✭Kermit.de.frog


    That’s the real threat. American multinationals moving to Austin and not Dublin. Within Europe Dublin remains a sane choice.

    We'll have to wait and see.

    The real nightnare now is an Intel or Google will destroy what I believe to be total deceit and delusion on this country's attractiveness outside of tax to these companies with a big bang announcement on getting out of here.

    People who think this can't happen I think are seriously mistaken.

    I hope it doesn't happen of course but I think it can!


  • Registered Users Posts: 32,136 ✭✭✭✭is_that_so


    fash wrote: »
    Currently? In California.
    Once tax becomes equalized? Could well be Lisbon, Malaga, Barcelona, Trieste etc.
    If you assume it is all about tax. There are many other other benefits here. We really have generated a critical mass in many industries now , IT and tech, pharma, finance.


  • Registered Users Posts: 118 ✭✭Chacha97


    We'll have to wait and see.

    The real nightnare now is an Intel or Google will destroy what I believe to be total deceit and delusion on this country's attractiveness outside of tax to these companies with a big bang announcement on getting out of here.

    People who think this can't happen I believe are seriously mistaken.

    I hope it doesn't happen of course but I think it can!

    I am a bit conscious of intel. They seem to be falling behind quite a bit in the semi conductor race. AMD seems to be flying it, nvidia doing OK but intel seems to be lagging a bit.

    I read a while ago a decent size investor in them was lobbying to outsource their chip manufacturing!


  • Registered Users Posts: 1,615 ✭✭✭flexcon


    So for example if Apple (based in Ireland) makes profits on sales to Germany, today Apple pays corporate tax to Ireland on the profits from those sales and those taxes are returned to the Irish Exchequer. In the future we will hand over those corporate taxes to the German Exchequer (at the German corporate tax rate). We will only keep the corporate tax on Apple profits from their sales within Ireland which for these large companies is tiny compared to their overall sales.

    Surprised this hasn't been picked up on yet.

    **The following take is a simplistic view. Pub talk alert so some details may be inaccurate**

    Your example I think I is false. Let me explain roughly what I mean.

    In short, Ireland chooses not to Tax profits made from other EU countries basically. We ignore them. So we already do what you suggested will become the norm.

    So an iPhone sold in Germany via ADI(Apple distribution International) has its revenue and profits booked through the Irish company. Under EU law, to prevent double taxation, all profits from all of Apples European sales are booked under ADI. However, ADI owes licensing agreements back to ASI (Apple Sales international) so the revenue might be 200billion for Europe, but the profit is 10million since the iPhone was on licence from ASI. For example, ADI buys the rights of ASI for the iPhone at a rate of 500dollars per phone, and sells the phone for 501 dollars meaning the maximum potential profit per iPhone sold in EU is 1 dollar.( clever eh?)

    So ADI makes a profit of 10million, and 12.5% of 10 million is 2.5million. Done.

    It's that mad.

    Other Notable points:
    12.5% tax is applied in FULL on all Irish profits from Apple from IRISH sales only. This is how the Irish government is playing its cards with the EU commission. It's true, Ireland does not give preferential treatment to Apple. It taxes Apple 12.5% of Irish profits.

    ASI is not tax resident in Ireland, so Ireland does not tax it. ASI is in Bermuda via a holding company in the Netherlands.
    This is where the mad 0.02% comes up when officially we are taxing Apple 12.5%.

    Source: In a previous life I worked in a partnership firm that helps with such matters and had this explained to me in the pub many times by the souls working in the deep end


  • Registered Users Posts: 3,532 ✭✭✭swampgas


    fvp4 wrote: »
    That’s the real threat. American multinationals moving to Austin and not Dublin. Within Europe Dublin remains a sane choice.

    American multinationals are already looking to locations in the US where they can hire skilled people at a lower cost than (say) Silicon Valley. All the same, companies I know in Austin struggle to hire developers.

    A big advantage for Ireland is that it pulls in skillled people from all over the EU, while having relatively employer-friendly legislation (from a US perspective) compared to many EU countries where employee protection is much stronger and more inflexible - like Spain say.


  • Posts: 3,801 ✭✭✭[Deleted User]


    fash wrote: »
    Currently? In California.
    Once tax becomes equalized? Could well be Lisbon, Malaga, Barcelona, Trieste etc.

    So one then, and none in Europe yet.

    I don’t think beaches nearby is a big reason for IT companies to move somewhere, on the hope that it would attract workers.


  • Registered Users Posts: 32,136 ✭✭✭✭is_that_so


    swampgas wrote: »
    American multinationals are already looking to locations in the US where they can hire skilled people at a lower cost than (say) Silicon Valley. All the same, companies I know in Austin struggle to hire developers.

    A big advantage for Ireland is that it pulls in skillled people from all over the EU, while having relatively employer-friendly legislation (from a US perspective) compared to many EU countries where employee protection is much stronger and more inflexible - like Spain say.
    Most countries in the EU have the same types of labour laws and then you have the likes of the French with their 13th month bonus.


  • Registered Users Posts: 23,370 ✭✭✭✭Kermit.de.frog


    Chacha97 wrote: »
    I am a bit conscious of intel. They seem to be falling behind quite a bit in the semi conductor race. AMD seems to be flying it, nvidia doing OK but intel seems to be lagging a bit.

    I read a while ago a decent size investor in them was lobbying to outsource their chip manufacturing!

    People also tend to overlook that Ireland is in a continuous tug of war with Israel over new Intel investments in their fab facilities. Safe to say looks like one bow is going from our arrow.

    The other concern is you could have longer term wind downs and exits. In other words they keep what they have but let operations naturally diminish through no new significant investments. A kinder way possibly but same result.

    I struggle to see, given the many problems the country has, our infrastructure deficits and quality of life issues how we are going to compete if forced to on a level playing field with well run and better cities in Europe on a like for like basis.


  • Registered Users Posts: 624 ✭✭✭Mullaghteelin


    This has been a revelation. I did not fully realise that our own low corporation tax rate did not just apply for business done in Ireland, but was being piggy-backed on by multinationals to deprive the rest of Europe (and elsewhere) of much needed revenues.

    I do not think Ireland struggled for independence just so we could take part in a tax race to the bottom and beggar our neighbours.

    We should sign on to the new G7 agenda with no ifs, ands or buts even if it does cost us. If we could afford to pay 64 billion Euros to bail out the banks, and if we could afford to refuse 13 billion Euros in the Apple appeal we can certainly afford to ship a 2 billion loss on corporation tax if it helps to produce fair and just taxation on multinational enterprises.

    It's been Ireland's main economic policy since the 70s and our gombeens are both very proud and protective of it. Any mention of the infamous words "Tax Haven" and our politicians get very defensive.
    I remember learning about it for Junior Cert in the mid-nineties, and even then thinking there was something sleazy and risky about it. What was to stop companies from going somewhere else even cheaper? What if our own native companies were to do the same?
    I equate gombeen politicians pulling strokes for their constituencies, at the expense of neighbouring counties, as the same mentality that celebrates bribing foreign companies here. There is no difference.
    Our cousins in America have lost out on jobs that have ended up here instead, and then we tut-tut hypocritically when any US president hints at encouraging such companies back to the US.


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  • Registered Users Posts: 118 ✭✭Chacha97


    People also tend to overlook that Ireland is in a continuous tug of war with Israel over new Intel investments in their fab facilities. Safe to say looks like one bow is going from our arrow.

    The other concern is you could have longer term wind downs and exits. In other words they keep what they have but let operations naturally diminish through no new significant investments. A kinder way possibly but same result.

    I struggle to see, given the many problems the country has, our infrastructure deficits and quality of life issues how we are going to compete if forced to on a level playing field with well run and better cities in Europe on a like for like basis.

    Didn't know intel ireland were competing with Israel! Mad how so much is going into new plant construction atm only for it to lose out eventually to israel


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