15 ms·

Irish Economy grew by 26.3% in 2015

106 points by s_dev 10y ago

british_india 10y ago
Tax evasion by American Tech companies.
- garrettheaver 10y ago
  Follow baseless political dogma much?
  - british_india 10y ago
    Never heard of the Dutch-Irish sandwich? All about tax evasion. Common knowledge. Your comment is ridiculous, Garrett.
- tonyedgecombe 10y ago
  If it was that much of a problem for America they could change their rules.
  - adventured 10y ago
    It's pretty likely the US will lower its corporate tax rate in the next decade to counter the big corporations that keep leaving. Most of Ireland's pharma industry consists of American-owned corporations that fled to Ireland solely for low corporate tax purposes. If you adjust the US corporate tax rate down, they can just as easily move back. Hillary is almost without question going to win the election. She has proclaimed that her husband would have a star role in regards to improving the economy. One of Bill's core economic ideas is to flatten the US corporate tax rate - lower the rate and remove various subsidies and loopholes - to make the US far more competitive with the rest of the world. If the US matches Western Europe on corporate tax rates - Europe has the lowest corporate tax rates of any major economic region - it'll begin pulling very large amounts of capital and major corporations away from everyone else.
  - british_india 10y ago
    If Ireland wishes to make themselves a tax haven, then the US has very little influence over that. But for anyone to claim that Ireland would experience this sort of growth without being the go-to tax avoidance location for the likes of Google, Apple, Facebook and fill in the blank--is ridiculous on its face. Through the phenomenon of "income stripping" these tech companies essentially gift their IP to their Irish subsidiaries and then the subsidiary charges the parent company to use that IP, thereby stripping the parent company's earnings from the US--where the companies are actually located--to these tax havens. In case you've been living under a rock you would know that Facebook has been fighting a lawsuit from the US treasury since 2010 over this exact situation.
- rmc 10y ago
  Lots of those tech companies employ a lot of local people. Tens of thousands of people.
  - branchless 10y ago
    And your point is? That work still needs doing, corporate profits are sky high. They can pay the tax and pay the workers. Also much of the money passing through Ireland is simply for tax evasion not because actual business is taking place there. It's little more than a tax haven. Here is an example of all those jobs created: https://en.wikipedia.org/wiki/Dutch_Sandwich_(tax_avoidance) https://en.wikipedia.org/wiki/Dutch_Sandwich_(tax_avoidance)
    - s_dev 10y ago
      Dutch Sandwich and Double Irish has been discontinued. It will be completely finished by 2020. To suggest it's still going in full swing is a little disingenuous as the info by itself is a little outdated. That applies to a limited number of companies. I think his point was that Ireland tends to tax the workers rather than the companies. So those companies are still a benefit to the country.
      - branchless 10y ago
        Yes but they are allowing those companies to avoid tax in the countries where the labour is being done. Lucky for them the UK is also getting desperate and instead of having it's own work is going to "attract" companies with lower corporation tax. Race you to the bottom.
        s_dev 10y ago
        The Irish economy was carefully constructed around the 12.5% rate for decades -- the UK is foolish if it thinks this new 15% rate will work for it and can just copy it to emulate the success Ireland has seen from its own rate. The low rate works if you're a small economy with access to a much larger economy. With Brexit looming and given the size of the UK it doesn't fit either of these important criteria for the strategy to work. I think Osborne lowered the rate the prevent an exodus of companies from the UK more than attract others to it.
- CalRobert 10y ago
  "british_india" Is there the possibility of some bias there?
s_dev 10y ago
The article does a pretty good job of explaining how they reached that figure. Massive financial manoeuvres involved in aircraft leasing industry. On a global level Ireland is the place for aircraft leasing. GDP and GNP are similar for most countries but Ireland is a small open and agile economy with a huge presence of foreign multinationals. Profits of these companies are often declared in Ireland but repatriated back to their host countries. Hence the disparity between the two figures. Ireland also entered a harsh recession from 2008 to 2014 so an element here is also simply making up for lost ground. This comes at a time when Ireland is bracing itself for Brexit. Ireland is massive trading partner of the UK. Ireland buys a similar amount from the UK as France for example. The strategy seems twofold - get the EU to empathise with Ireland so that the UK doesn't have to got though a hard exit and introduce a hard border. While also trying to rob all the companies looking to relocate to an EU location from London. For me whats interesting so much value being added to the Irish economy with relatively little actually coming from construction. Something Ireland was little too dependant on.
- k-mcgrady 10y ago
  >> "so that the UK doesn't have to got though a hard exit and introduce a hard border" I don't see anyway around the hard border. If border EU countries are required to protect their border as I've been lead to believe then Ireland now has to do that unless UK excepts freedom of movement.
  - s_dev 10y ago
    Rumour has it the UK will likely go for EEA membership after invoking article 50. This isn't foregone conclusion but a possibility and some would say likely outcome. UK will have to accept EU migration and contribute to EU purse but doesn't have a seat at the table making the whole referendum a fruitless pursuit that cost the UK political clout. Conversely the Germans may see Brexit as a threat to the EU (particularly if the UK does well outside the EU) and may veto the UK joining the EEA. The UK performing poorly outside the EU would act as a disincentive to other members who may be weighing up leaving. Another alternative to the hard border between N.Ireland and Ireland is a hard border between N.Ireland and the rest of the UK. Though some saying having to use a passport to travel within your own country defeats the purpose of the country.
markokrajnc 10y ago
And it may grow even more when some/many US subsidiaries in UK will move to Ireland after Brexit (english speaking country in EU is attracting many US companies)...
- garrettheaver 10y ago
  Ireland can definitely capitalise on this calamity and there is no doubting how good the IDA are at what they do. What could make it a major success story is if the Dept of Finance get their act together and finally listen to what the investment community has been telling them for years re competitiveness.
GnarlyWhale 10y ago
Does anyone have an idea of how this may impacting the job market for Developers/Engineers? I've been interested in potentially moving to Ireland for some time, but have held off because it was my understanding that work was much harder to come by (vs. North American standards).
- s_dev 10y ago
  I help mod a sub reddit called /r/DevelEire for Irish software developers. Might be a good place to check out if you're seriously considering it. 1. A fair number of companies to relocate to Dublin post Brexit. 2. Large indigenous growth coming from Irish startups. Slowly the scene has been building and maturing for years. 3. You'll have to take a 50% wage cut if you come to Ireland. American software developers are paid approx 2x their Irish counterparts.
  - talideon 10y ago
    OTOH, even Dublin is vastly cheaper than SV, with an excellent quality of life.
    - dkersten 10y ago
      Yes, lower salary but lower cost of living. Dublin is expensive by Irish standards, but its not SV-expensive. If you work somewhere that doesn't require you to live in Dublin or Cork, then you can cut costs drastically (I live in the midlands in a 3 bedroom house and it costs me about 60% of a one-bed apartment in Dublin).
- CalRobert 10y ago
  I made this move. I don't regret it in the least. What other people have written is true: * Lower (but not atrocious) salaray * Lower cost of living (even during the present rent crisis it's nowhere near as bad as the bay) * (Subjective) more relaxed lifestyle. * Gorgeous summers * Challenging winters if you like sun. (I don't really, and even I get sick of it around Jan/Feb) Find info in my profile if you want to ask questions.
ferdinandvwyk 10y ago
As the article hinted, there's a lot to consider when reaching the headline figure. Here's the associated grain of salt: http://www.irishtimes.com/business/economy/analysis-crazy-growth-figures-bear-scant-relationship-to-reality-1.2719106 http://www.irishtimes.com/business/economy/analysis-crazy-gr...
padobson 10y ago
Seeing a growth number like 26.3% is like seeing a sprinter run the 100m in 9.43s. At first you're impressed, and then you immediately wonder what PEDs they're taking.
bennalle 10y ago
Check out Paul Krugman's latest input on these numbers. In his recent tweet he points out that a lot of this growth is from technology companies transferring their IP assets or patents to Ireland. Which shouldn't be added to GDP.

106 points by s_dev 10y ago

british_india 10y ago

Tax evasion by American Tech companies.

garrettheaver 10y ago
Follow baseless political dogma much?
- british_india 10y ago
  Never heard of the Dutch-Irish sandwich? All about tax evasion. Common knowledge. Your comment is ridiculous, Garrett.
tonyedgecombe 10y ago
If it was that much of a problem for America they could change their rules.
- adventured 10y ago
  It's pretty likely the US will lower its corporate tax rate in the next decade to counter the big corporations that keep leaving. Most of Ireland's pharma industry consists of American-owned corporations that fled to Ireland solely for low corporate tax purposes. If you adjust the US corporate tax rate down, they can just as easily move back. Hillary is almost without question going to win the election. She has proclaimed that her husband would have a star role in regards to improving the economy. One of Bill's core economic ideas is to flatten the US corporate tax rate - lower the rate and remove various subsidies and loopholes - to make the US far more competitive with the rest of the world. If the US matches Western Europe on corporate tax rates - Europe has the lowest corporate tax rates of any major economic region - it'll begin pulling very large amounts of capital and major corporations away from everyone else.
- british_india 10y ago
  If Ireland wishes to make themselves a tax haven, then the US has very little influence over that. But for anyone to claim that Ireland would experience this sort of growth without being the go-to tax avoidance location for the likes of Google, Apple, Facebook and fill in the blank--is ridiculous on its face. Through the phenomenon of "income stripping" these tech companies essentially gift their IP to their Irish subsidiaries and then the subsidiary charges the parent company to use that IP, thereby stripping the parent company's earnings from the US--where the companies are actually located--to these tax havens. In case you've been living under a rock you would know that Facebook has been fighting a lawsuit from the US treasury since 2010 over this exact situation.
rmc 10y ago
Lots of those tech companies employ a lot of local people. Tens of thousands of people.
- branchless 10y ago
  And your point is? That work still needs doing, corporate profits are sky high. They can pay the tax and pay the workers. Also much of the money passing through Ireland is simply for tax evasion not because actual business is taking place there. It's little more than a tax haven. Here is an example of all those jobs created: https://en.wikipedia.org/wiki/Dutch_Sandwich_(tax_avoidance) https://en.wikipedia.org/wiki/Dutch_Sandwich_(tax_avoidance)
  - s_dev 10y ago
    Dutch Sandwich and Double Irish has been discontinued. It will be completely finished by 2020. To suggest it's still going in full swing is a little disingenuous as the info by itself is a little outdated. That applies to a limited number of companies. I think his point was that Ireland tends to tax the workers rather than the companies. So those companies are still a benefit to the country.
    - branchless 10y ago
      Yes but they are allowing those companies to avoid tax in the countries where the labour is being done. Lucky for them the UK is also getting desperate and instead of having it's own work is going to "attract" companies with lower corporation tax. Race you to the bottom.
      - s_dev 10y ago
        The Irish economy was carefully constructed around the 12.5% rate for decades -- the UK is foolish if it thinks this new 15% rate will work for it and can just copy it to emulate the success Ireland has seen from its own rate. The low rate works if you're a small economy with access to a much larger economy. With Brexit looming and given the size of the UK it doesn't fit either of these important criteria for the strategy to work. I think Osborne lowered the rate the prevent an exodus of companies from the UK more than attract others to it.
CalRobert 10y ago
"british_india" Is there the possibility of some bias there?

s_dev 10y ago

The article does a pretty good job of explaining how they reached that figure. Massive financial manoeuvres involved in aircraft leasing industry. On a global level Ireland is the place for aircraft leasing. GDP and GNP are similar for most countries but Ireland is a small open and agile economy with a huge presence of foreign multinationals. Profits of these companies are often declared in Ireland but repatriated back to their host countries. Hence the disparity between the two figures. Ireland also entered a harsh recession from 2008 to 2014 so an element here is also simply making up for lost ground. This comes at a time when Ireland is bracing itself for Brexit. Ireland is massive trading partner of the UK. Ireland buys a similar amount from the UK as France for example. The strategy seems twofold - get the EU to empathise with Ireland so that the UK doesn't have to got though a hard exit and introduce a hard border. While also trying to rob all the companies looking to relocate to an EU location from London. For me whats interesting so much value being added to the Irish economy with relatively little actually coming from construction. Something Ireland was little too dependant on.

k-mcgrady 10y ago
>> "so that the UK doesn't have to got though a hard exit and introduce a hard border" I don't see anyway around the hard border. If border EU countries are required to protect their border as I've been lead to believe then Ireland now has to do that unless UK excepts freedom of movement.
- s_dev 10y ago
  Rumour has it the UK will likely go for EEA membership after invoking article 50. This isn't foregone conclusion but a possibility and some would say likely outcome. UK will have to accept EU migration and contribute to EU purse but doesn't have a seat at the table making the whole referendum a fruitless pursuit that cost the UK political clout. Conversely the Germans may see Brexit as a threat to the EU (particularly if the UK does well outside the EU) and may veto the UK joining the EEA. The UK performing poorly outside the EU would act as a disincentive to other members who may be weighing up leaving. Another alternative to the hard border between N.Ireland and Ireland is a hard border between N.Ireland and the rest of the UK. Though some saying having to use a passport to travel within your own country defeats the purpose of the country.

markokrajnc 10y ago

And it may grow even more when some/many US subsidiaries in UK will move to Ireland after Brexit (english speaking country in EU is attracting many US companies)...

garrettheaver 10y ago
Ireland can definitely capitalise on this calamity and there is no doubting how good the IDA are at what they do. What could make it a major success story is if the Dept of Finance get their act together and finally listen to what the investment community has been telling them for years re competitiveness.

GnarlyWhale 10y ago

Does anyone have an idea of how this may impacting the job market for Developers/Engineers? I've been interested in potentially moving to Ireland for some time, but have held off because it was my understanding that work was much harder to come by (vs. North American standards).

s_dev 10y ago
I help mod a sub reddit called /r/DevelEire for Irish software developers. Might be a good place to check out if you're seriously considering it. 1. A fair number of companies to relocate to Dublin post Brexit. 2. Large indigenous growth coming from Irish startups. Slowly the scene has been building and maturing for years. 3. You'll have to take a 50% wage cut if you come to Ireland. American software developers are paid approx 2x their Irish counterparts.
- talideon 10y ago
  OTOH, even Dublin is vastly cheaper than SV, with an excellent quality of life.
  - dkersten 10y ago
    Yes, lower salary but lower cost of living. Dublin is expensive by Irish standards, but its not SV-expensive. If you work somewhere that doesn't require you to live in Dublin or Cork, then you can cut costs drastically (I live in the midlands in a 3 bedroom house and it costs me about 60% of a one-bed apartment in Dublin).
CalRobert 10y ago
I made this move. I don't regret it in the least. What other people have written is true: * Lower (but not atrocious) salaray * Lower cost of living (even during the present rent crisis it's nowhere near as bad as the bay) * (Subjective) more relaxed lifestyle. * Gorgeous summers * Challenging winters if you like sun. (I don't really, and even I get sick of it around Jan/Feb) Find info in my profile if you want to ask questions.

ferdinandvwyk 10y ago

As the article hinted, there's a lot to consider when reaching the headline figure. Here's the associated grain of salt: http://www.irishtimes.com/business/economy/analysis-crazy-growth-figures-bear-scant-relationship-to-reality-1.2719106 http://www.irishtimes.com/business/economy/analysis-crazy-gr...

padobson 10y ago

Seeing a growth number like 26.3% is like seeing a sprinter run the 100m in 9.43s. At first you're impressed, and then you immediately wonder what PEDs they're taking.

bennalle 10y ago

Check out Paul Krugman's latest input on these numbers. In his recent tweet he points out that a lot of this growth is from technology companies transferring their IP assets or patents to Ireland. Which shouldn't be added to GDP.