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> Low tax member states like Ireland have been under political assault for decades and this is the latest attempt to redress something the EU has no power over.

> Low tax member states like Ireland have been under political assault for decades and this is the latest attempt to redress something the EU has no power over. If the EU wanted a unified tax regime across all members it should have been designed that way from the outset, You're wrong, this is not about harmonizing tax rates. Ireland already has one of the lowest corporate tax rates which is 12.5%. However, through the Ireland deal/loophole, Apple was paying an effective rate of 0.0005%. Rectifying that is the point[1]. The EU specifically put these anti-state aid laws on the books decades ago, it's not new. Ireland will still have the ability to set their tax rates for all coporations [1] http://europa.eu/rapid/press-release_IP-16-2923_en.htm http://europa.eu/rapid/press-release_IP-16-2923_en.htm

charlesdm 10y ago
So, the thing I am curious about.. what will happen when the first member state lowers its corporate tax rate to 0%? I can easily see that happening within the next decade or so (Hungary is at 9%, Malta at 5%, etc).
- doikor 10y ago
  Question is that how does a state fund itself with that low of corporate tax? The entity that Apple is shuffling the money through in Ireland has 0 employees and no office and thus doesn't generate any other tax revenue.
  - charlesdm 10y ago
    Corporate taxes tend to only be a small amount of the amount of incoming tax. Personal taxes, i.e. on salaries / dividends / capital gains taxes tend to generate the bulk of tax revenues.
  - Retric 10y ago
    0.0005% is > 0% which is what they would get without this arrangement. In effect Ireland set's things up to collect a token payment by letting companies dodge other companies taxes. (ed: taxes paid by other companies.) This presents zero problems for Ireland and pisses off other countries.
    - scholia 10y ago
      > by letting companies dodge other companies taxes I think you mean "by letting companies dodge other country's taxes"! Not many people here seem to appreciate that that's what Apple is doing. It's basically a scam. (1) Avoid paying taxes in the UK, Germany, France etc by claiming you're taxed in Ireland. (2) Once in Ireland, channel the money into a fake company (0 staff, 0 offices) that is stateless and isn't taxed anywhere. > This presents zero problems for Ireland and pisses off other countries. Exactly. It's a fraud on EU taxpayers outside Ireland. Apple gets all the benefits of state spending in EU countries -- education, health, police, roads etc -- and avoids paying its fair share of the costs.
      - Retric 10y ago
        > I think you mean "by letting companies dodge other country's taxes"! No, I was thinking companies dodge the taxes other companies pay. Saying they dodge other countries taxes is not really correct as these companies are following the other countries tax laws. France etc. could have different laws which prevented companies from benefiting from Ireland's tax laws. Basically, "by claiming you're taxed in Ireland" only works because France, and Germany etc have laws saying it works.
        doikor 10y ago
        It works because EU laws says that if you operate in one EU country you can operate in any EU country from it. And due to this EU has very strict laws about giving preferential treatment to companies.
        scholia 10y ago
        Sure. The problem is Apple telling France, Germany etc that they're taxed in Ireland, and then the money not being taxed in Ireland because it's funneled into some stateless figment of Apple's corporate imagination....
  - witty_username 10y ago
    Increase income taxes. Remember, when a "corporation" pays taxes, people like shareholders, workers, and consumers are paying taxes.
- belorn 10y ago
  Interesting budget question, how will government fund itself? I guess nations like malta could rely on exporting state owned ventures like taboo, but what about Hungary? They happen to have the highest value added tax in Europe, and Tax revenue in Hungary stand at 39.3% of GDP. One way or the other, taxes are being paid.
  - charlesdm 10y ago
    Income taxes (i.e. personal taxes, dividend taxes, capital gains taxes), VAT, etc etc. Corporate taxes tend to not bring in that much money for most countries.
- jaredklewis 10y ago
  Governments fund their spending with more sensible tax methods? The incentives of a corporate income tax are wacky. It basically disincentives economic development. Also it's possible for multinationals to push income around and largely evade income taxes anyway, making them very unfair to non-multinationals.
  - charlesdm 10y ago
    I agree. I think it's better to tax dividends higher, but say, not tax corporate profits. That would allow you reinvest most of those profits back into the business without taking a hit.
    - dingaling 10y ago
      If a company has made a profit then it's too late to reinvest that money.It is money that the company didn't find a way to spend. Profits sit in bank accounts or are distributed to shareholders. It might make sense to grant companies a tax-free allowance equivalent to six months of operational costs, but corporation tax is designed to deter hoarding and thereby force money into circulation
      - nradov 10y ago
        There is no such thing as companies hoarding money. They don't stick billions of Euros in a big vault somewhere. They deposit it in bank accounts (or other similar investments), and then the banks put some multiple of the deposits into circulation through fractional reserve lending.
        Jommi 10y ago
        wow, way to nitpick on irrelevant things. you know exactly what he meant
        nradov 10y ago
        It is absolutely relevant. This is the fundamental basis of the modern monetary system, yet people here are asking for policy changes without even understanding how it works.
astaunton 10y ago
Irish corporate tax rate is 13.5% and has been since 1980's and was set to try and encourage business to come to Ireland and to get the country out of a recession.

charlesdm 10y ago

So, the thing I am curious about.. what will happen when the first member state lowers its corporate tax rate to 0%? I can easily see that happening within the next decade or so (Hungary is at 9%, Malta at 5%, etc).

doikor 10y ago
Question is that how does a state fund itself with that low of corporate tax? The entity that Apple is shuffling the money through in Ireland has 0 employees and no office and thus doesn't generate any other tax revenue.
- charlesdm 10y ago
  Corporate taxes tend to only be a small amount of the amount of incoming tax. Personal taxes, i.e. on salaries / dividends / capital gains taxes tend to generate the bulk of tax revenues.
- Retric 10y ago
  0.0005% is > 0% which is what they would get without this arrangement. In effect Ireland set's things up to collect a token payment by letting companies dodge other companies taxes. (ed: taxes paid by other companies.) This presents zero problems for Ireland and pisses off other countries.
  - scholia 10y ago
    > by letting companies dodge other companies taxes I think you mean "by letting companies dodge other country's taxes"! Not many people here seem to appreciate that that's what Apple is doing. It's basically a scam. (1) Avoid paying taxes in the UK, Germany, France etc by claiming you're taxed in Ireland. (2) Once in Ireland, channel the money into a fake company (0 staff, 0 offices) that is stateless and isn't taxed anywhere. > This presents zero problems for Ireland and pisses off other countries. Exactly. It's a fraud on EU taxpayers outside Ireland. Apple gets all the benefits of state spending in EU countries -- education, health, police, roads etc -- and avoids paying its fair share of the costs.
    - Retric 10y ago
      > I think you mean "by letting companies dodge other country's taxes"! No, I was thinking companies dodge the taxes other companies pay. Saying they dodge other countries taxes is not really correct as these companies are following the other countries tax laws. France etc. could have different laws which prevented companies from benefiting from Ireland's tax laws. Basically, "by claiming you're taxed in Ireland" only works because France, and Germany etc have laws saying it works.
      - doikor 10y ago
        It works because EU laws says that if you operate in one EU country you can operate in any EU country from it. And due to this EU has very strict laws about giving preferential treatment to companies.
      - scholia 10y ago
        Sure. The problem is Apple telling France, Germany etc that they're taxed in Ireland, and then the money not being taxed in Ireland because it's funneled into some stateless figment of Apple's corporate imagination....
- witty_username 10y ago
  Increase income taxes. Remember, when a "corporation" pays taxes, people like shareholders, workers, and consumers are paying taxes.
belorn 10y ago
Interesting budget question, how will government fund itself? I guess nations like malta could rely on exporting state owned ventures like taboo, but what about Hungary? They happen to have the highest value added tax in Europe, and Tax revenue in Hungary stand at 39.3% of GDP. One way or the other, taxes are being paid.
- charlesdm 10y ago
  Income taxes (i.e. personal taxes, dividend taxes, capital gains taxes), VAT, etc etc. Corporate taxes tend to not bring in that much money for most countries.
jaredklewis 10y ago
Governments fund their spending with more sensible tax methods? The incentives of a corporate income tax are wacky. It basically disincentives economic development. Also it's possible for multinationals to push income around and largely evade income taxes anyway, making them very unfair to non-multinationals.
- charlesdm 10y ago
  I agree. I think it's better to tax dividends higher, but say, not tax corporate profits. That would allow you reinvest most of those profits back into the business without taking a hit.
  - dingaling 10y ago
    If a company has made a profit then it's too late to reinvest that money.It is money that the company didn't find a way to spend. Profits sit in bank accounts or are distributed to shareholders. It might make sense to grant companies a tax-free allowance equivalent to six months of operational costs, but corporation tax is designed to deter hoarding and thereby force money into circulation
    - nradov 10y ago
      There is no such thing as companies hoarding money. They don't stick billions of Euros in a big vault somewhere. They deposit it in bank accounts (or other similar investments), and then the banks put some multiple of the deposits into circulation through fractional reserve lending.
      - Jommi 10y ago
        wow, way to nitpick on irrelevant things. you know exactly what he meant
        nradov 10y ago
        It is absolutely relevant. This is the fundamental basis of the modern monetary system, yet people here are asking for policy changes without even understanding how it works.

astaunton 10y ago

Irish corporate tax rate is 13.5% and has been since 1980's and was set to try and encourage business to come to Ireland and to get the country out of a recession.