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"This resulted in estimated revenue losses for EU states, other than Ireland, of between 51 and 54 billion euros between 2013 and 2015, the report concluded."

"This resulted in estimated revenue losses for EU states, other than Ireland, of between 51 and 54 billion euros between 2013 and 2015, the report concluded." So if i understand this right, this is basically: the EU didn't really lose anything, since ireland is in the EU, but the other states would have gotten more in total if they weren't allowed to do this? My other understanding is that the tax laws of all the EU countries are not controlled by the EU, but by the individual countries? If so, this sounds like it would be like saying "US states lose billions in tax revenue from Google because they locate in delaware" Is that a reasonable conversion for a US'ian?

sddfd 9y ago
Not really. Ireland has some deals going with several digital multinationals. The guardian writes: "Google pays €47m in tax in Ireland on €22bn sales revenue" https://www.theguardian.com/business/2016/nov/04/google-pays-47m-euros-tax-ireland-22bn-euros-revenue https://www.theguardian.com/business/2016/nov/04/google-pays...
- gaius 9y ago
  Ireland is only able to charge such low corporation tax due to the generous subsidies it receives from the EU too.
  - anonymousDan 9y ago
    Eh? Think you need to get your facts straight: https://amp.independent.ie/business/irish/ireland-contributes-more-money-than-it-gets-to-eu-for-first-time-34815450.html https://amp.independent.ie/business/irish/ireland-contribute...
    - endless1234 9y ago
      Hm? "For the first time since it joined the bloc in 1973" "Since 1973, Ireland has received over €50bn."
      - lin_lin 9y ago
        Well if we're going down that road, that figure is dwarfed by the amount of debt the Irish State took on to bail out European banks...
        arethuza 9y ago
        Wasn't it more like the Irish State was "forced" to bail out some truly awful Irish Banks who were lending money they had borrowed from European banks?
      - anonymousDan 9y ago
        So what, your point was that the only reason Ireland can maintain a low corporation tax rate is they benefit from EU funding. And here we are today with Ireland a net contributor to the EU and yet they still manage to maintain a low corporation tax rate.
  - Supernaut 9y ago
    Can we see some evidence for that claim? According to my research, Ireland is a net contributor to the EU budget. In 2014, the last year for which complete data is available, the country paid €168m more to the EU than it received in grants and payments.
    - peteretep 9y ago
      Your comment is either unlucky or massively disingenuous in choosing 2014, as: "Ireland has [in 2014] become a small net contributor to the EU Budget for the first time since it joined the bloc in 1973" http://www.independent.ie/business/irish/ireland-contributes-more-money-than-it-gets-to-eu-for-first-time-34815450.html http://www.independent.ie/business/irish/ireland-contributes...
      - Supernaut 9y ago
        I'm not sure what the point you're making is. The country's corporate tax rate was only reduced to 12.5% in the late '90s. Before that, it was comparable to other that of other EU nations. The reduction in the rate, along with other factors, helped the economy to grow over the next 15 years, to the point where the country became a net contributor. It would have happened well before 2014 had the Irish economy not been reeling from the effects of the 2008 crash.
      - ptaipale 9y ago
        I think it is not massively disingenuous to use the newest data available. I did not find much better figures for 2015 or 2016. Another source suggests that Ireland has been net contributor since 2013 and continued so in 2015. http://www.thejournal.ie/ireland-financial-gain-from-eu-frances-fitzgerald-facts-2894694-Jul2016/ http://www.thejournal.ie/ireland-financial-gain-from-eu-fran... It is true that Ireland has been a huge net receiver from EU for a long time. Now that it becomes a net contributor, I suppose we could call that "development". And perhaps this shows that Irish tax policies do increase its economic activities.
- lin_lin 9y ago
  Nice selective headlining from the Guardian. Usually txes are paid on profits. Wouldn't drive the clicks though.
  - sddfd 9y ago
    > [..] selective headlining [..] Wouldn't drive the clicks though. I disagree. The profits are not essential here, because the issue is that the profits are quite small because a tax accounting trick called "double irish" was used (which is explained in the article).
Iv 9y ago
There is a movement calling for tax harmonization in EU. I think this is a "what-if" scenario. "What if there were no internal competition between EU state to make a race to the bottom in terms of tax on profits?"
- themihai 9y ago
  Well the issue is not the competition on tax, it's tax avoidance/evasion. You can't compete on tax with fiscal paradises that provide no infrastructure to operate a business. Most of the corporations within EU simply create shell companies in Luxembourg and artificially siphon off their profits so that they can pay 1% tax there instead of aprox 20% within EU. Luxembourg doesn't contribute with anything(i.e. infrastructure) to their profit thus I believe this is not "fair". If this[1] is not tax evasion I don't know what tax evasion is [1] https://www.theguardian.com/business/2014/nov/05/-sp-luxembourg-tax-files-tax-avoidance-industrial-scale https://www.theguardian.com/business/2014/nov/05/-sp-luxembo...
  - deleted 9y ago
    [deleted]
  - peteretep 9y ago
    > You can't compete on tax with > fiscal paradises that provide > no infrastructure to operate a > business eg the Isle of Man, where you can get an EU VAT number and pay 0% corporate tax.
- Shivetya 9y ago
  well if you dug deep enough you would find it driven by the countries within the EU that have the stronger and more stable economies. In effect they will keep the poorer countries poor because they will be unable to provide tax incentives to gain new businesses. a classic move branded under some guilt assuming title to prey on people's ignorance to support it. while there may need to be limits on how sweet of deals that can be made the idea that you can "harmonize" taxes across such a diverse number of countries is unrealistic. Those large countries using this idea to protect their tax base aren't going to also turn around and bring up the poorer countries
wheresvic1 9y ago
Yes your analysis is correct - this would be a what if scenario
Heliosmaster 9y ago
If you were talking about state taxes only, yes. There's no equivalent of federal taxes in EU.
lucideer 9y ago
> My other understanding is that the tax laws of all the EU countries are not controlled by the EU, but by the individual countries? This is partially but not 100% correct. Tax laws are controlled or "administered" by individual countries but overseen by EU directives. This means that while individual countries apply the law, their application must comply with EU guidelines. The Irish government has been found guilty in EU court of violating EU law in a tax deal they made with Apple, and this is following on examining tax deals Ireland (or other states, I'm not quite clear on that point myself?) has(/have) made with other large multinationals, and what they would/could be found similarly guilty of were it brought before an EU court.
- anonymousDan 9y ago
  For what it's worth, that ruling is strongly disputed by the Irish Government and is under appeal.
  - lucideer 9y ago
    True, though Ireland currently has a minority government operating under a combination of coalition and confidence and supply[0], and the ruling is broadly supported not only by opposition, but also by independent coalition members. Opposition to the EU ruling is far from a popular position within Ireland, even within government. "Strongly" is an overstatement. [0] https://en.wikipedia.org/wiki/Confidence_and_supply https://en.wikipedia.org/wiki/Confidence_and_supply
    - anonymousDan 9y ago
      It is strongly disputed by the government, I wasn't talking about the opposition. And Fianna Fail, the main opposition party, would also broadly support the government's position. There is zero chance of there being a government in the foreseeable future that would take a contrary position.
- peoplewindow 9y ago
  Can you cite the parts of the treaties that say that? The reality is that in the treaties the EU very explicitly does not have control over tax. In fact, this was a key issue in the last Irish referendum on the EU treaty changes. The Irish rejected the treaty until they received explicit assurances from the EU that they'd never lose any control over local tax and the EU wouldn't attempt to undermine their local corporate tax rates. But as it turns out, the EU's assurances on such things were useless and the Irish people were misled. http://news.bbc.co.uk/1/hi/8288181.stm http://news.bbc.co.uk/1/hi/8288181.stm Irish opinion is thought to have swung behind the "Yes" vote this time because of the severity of the economic downturn, as well as the legal "guarantees" on Irish sovereignty that the EU pledged after the first referendum. The legally binding "guarantees" state that Lisbon will not affect key areas of Irish sovereignty, such as taxation, military neutrality and family matters such as abortion - significant issues in last year's campaign in Ireland. But they have not yet been attached to the treaty.
markvdb 9y ago
Not a reasonable conversion for mainly two reasons: * Ireland is a stepstone to not taxing most of their profits at all. Read about the double Irish with a Dutch sandwich (expiring in 2020). Google for example was (is?) an aggressive user of this technique. * Ireland has made (according to the EU) illegal custom agreements with multinationals. These erode the taxable base in a way that has no link with reality whatsoever. That goes against OECD and EU principles. [0] https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement [1] https://www.nytimes.com/2016/08/31/technology/apple-tax-eu-ireland.html https://www.nytimes.com/2016/08/31/technology/apple-tax-eu-i...

sddfd 9y ago

Not really. Ireland has some deals going with several digital multinationals. The guardian writes: "Google pays €47m in tax in Ireland on €22bn sales revenue" https://www.theguardian.com/business/2016/nov/04/google-pays-47m-euros-tax-ireland-22bn-euros-revenue https://www.theguardian.com/business/2016/nov/04/google-pays...

gaius 9y ago
Ireland is only able to charge such low corporation tax due to the generous subsidies it receives from the EU too.
- anonymousDan 9y ago
  Eh? Think you need to get your facts straight: https://amp.independent.ie/business/irish/ireland-contributes-more-money-than-it-gets-to-eu-for-first-time-34815450.html https://amp.independent.ie/business/irish/ireland-contribute...
  - endless1234 9y ago
    Hm? "For the first time since it joined the bloc in 1973" "Since 1973, Ireland has received over €50bn."
    - lin_lin 9y ago
      Well if we're going down that road, that figure is dwarfed by the amount of debt the Irish State took on to bail out European banks...
      - arethuza 9y ago
        Wasn't it more like the Irish State was "forced" to bail out some truly awful Irish Banks who were lending money they had borrowed from European banks?
    - anonymousDan 9y ago
      So what, your point was that the only reason Ireland can maintain a low corporation tax rate is they benefit from EU funding. And here we are today with Ireland a net contributor to the EU and yet they still manage to maintain a low corporation tax rate.
- Supernaut 9y ago
  Can we see some evidence for that claim? According to my research, Ireland is a net contributor to the EU budget. In 2014, the last year for which complete data is available, the country paid €168m more to the EU than it received in grants and payments.
  - peteretep 9y ago
    Your comment is either unlucky or massively disingenuous in choosing 2014, as: "Ireland has [in 2014] become a small net contributor to the EU Budget for the first time since it joined the bloc in 1973" http://www.independent.ie/business/irish/ireland-contributes-more-money-than-it-gets-to-eu-for-first-time-34815450.html http://www.independent.ie/business/irish/ireland-contributes...
    - Supernaut 9y ago
      I'm not sure what the point you're making is. The country's corporate tax rate was only reduced to 12.5% in the late '90s. Before that, it was comparable to other that of other EU nations. The reduction in the rate, along with other factors, helped the economy to grow over the next 15 years, to the point where the country became a net contributor. It would have happened well before 2014 had the Irish economy not been reeling from the effects of the 2008 crash.
    - ptaipale 9y ago
      I think it is not massively disingenuous to use the newest data available. I did not find much better figures for 2015 or 2016. Another source suggests that Ireland has been net contributor since 2013 and continued so in 2015. http://www.thejournal.ie/ireland-financial-gain-from-eu-frances-fitzgerald-facts-2894694-Jul2016/ http://www.thejournal.ie/ireland-financial-gain-from-eu-fran... It is true that Ireland has been a huge net receiver from EU for a long time. Now that it becomes a net contributor, I suppose we could call that "development". And perhaps this shows that Irish tax policies do increase its economic activities.
lin_lin 9y ago
Nice selective headlining from the Guardian. Usually txes are paid on profits. Wouldn't drive the clicks though.
- sddfd 9y ago
  > [..] selective headlining [..] Wouldn't drive the clicks though. I disagree. The profits are not essential here, because the issue is that the profits are quite small because a tax accounting trick called "double irish" was used (which is explained in the article).

Iv 9y ago

There is a movement calling for tax harmonization in EU. I think this is a "what-if" scenario. "What if there were no internal competition between EU state to make a race to the bottom in terms of tax on profits?"

themihai 9y ago
Well the issue is not the competition on tax, it's tax avoidance/evasion. You can't compete on tax with fiscal paradises that provide no infrastructure to operate a business. Most of the corporations within EU simply create shell companies in Luxembourg and artificially siphon off their profits so that they can pay 1% tax there instead of aprox 20% within EU. Luxembourg doesn't contribute with anything(i.e. infrastructure) to their profit thus I believe this is not "fair". If this[1] is not tax evasion I don't know what tax evasion is [1] https://www.theguardian.com/business/2014/nov/05/-sp-luxembourg-tax-files-tax-avoidance-industrial-scale https://www.theguardian.com/business/2014/nov/05/-sp-luxembo...
- deleted 9y ago
  [deleted]
- peteretep 9y ago
  > You can't compete on tax with > fiscal paradises that provide > no infrastructure to operate a > business eg the Isle of Man, where you can get an EU VAT number and pay 0% corporate tax.
Shivetya 9y ago
well if you dug deep enough you would find it driven by the countries within the EU that have the stronger and more stable economies. In effect they will keep the poorer countries poor because they will be unable to provide tax incentives to gain new businesses. a classic move branded under some guilt assuming title to prey on people's ignorance to support it. while there may need to be limits on how sweet of deals that can be made the idea that you can "harmonize" taxes across such a diverse number of countries is unrealistic. Those large countries using this idea to protect their tax base aren't going to also turn around and bring up the poorer countries

wheresvic1 9y ago

Yes your analysis is correct - this would be a what if scenario

Heliosmaster 9y ago

If you were talking about state taxes only, yes. There's no equivalent of federal taxes in EU.

lucideer 9y ago

> My other understanding is that the tax laws of all the EU countries are not controlled by the EU, but by the individual countries? This is partially but not 100% correct. Tax laws are controlled or "administered" by individual countries but overseen by EU directives. This means that while individual countries apply the law, their application must comply with EU guidelines. The Irish government has been found guilty in EU court of violating EU law in a tax deal they made with Apple, and this is following on examining tax deals Ireland (or other states, I'm not quite clear on that point myself?) has(/have) made with other large multinationals, and what they would/could be found similarly guilty of were it brought before an EU court.

anonymousDan 9y ago
For what it's worth, that ruling is strongly disputed by the Irish Government and is under appeal.
- lucideer 9y ago
  True, though Ireland currently has a minority government operating under a combination of coalition and confidence and supply[0], and the ruling is broadly supported not only by opposition, but also by independent coalition members. Opposition to the EU ruling is far from a popular position within Ireland, even within government. "Strongly" is an overstatement. [0] https://en.wikipedia.org/wiki/Confidence_and_supply https://en.wikipedia.org/wiki/Confidence_and_supply
  - anonymousDan 9y ago
    It is strongly disputed by the government, I wasn't talking about the opposition. And Fianna Fail, the main opposition party, would also broadly support the government's position. There is zero chance of there being a government in the foreseeable future that would take a contrary position.
peoplewindow 9y ago
Can you cite the parts of the treaties that say that? The reality is that in the treaties the EU very explicitly does not have control over tax. In fact, this was a key issue in the last Irish referendum on the EU treaty changes. The Irish rejected the treaty until they received explicit assurances from the EU that they'd never lose any control over local tax and the EU wouldn't attempt to undermine their local corporate tax rates. But as it turns out, the EU's assurances on such things were useless and the Irish people were misled. http://news.bbc.co.uk/1/hi/8288181.stm http://news.bbc.co.uk/1/hi/8288181.stm Irish opinion is thought to have swung behind the "Yes" vote this time because of the severity of the economic downturn, as well as the legal "guarantees" on Irish sovereignty that the EU pledged after the first referendum. The legally binding "guarantees" state that Lisbon will not affect key areas of Irish sovereignty, such as taxation, military neutrality and family matters such as abortion - significant issues in last year's campaign in Ireland. But they have not yet been attached to the treaty.

markvdb 9y ago

Not a reasonable conversion for mainly two reasons: * Ireland is a stepstone to not taxing most of their profits at all. Read about the double Irish with a Dutch sandwich (expiring in 2020). Google for example was (is?) an aggressive user of this technique. * Ireland has made (according to the EU) illegal custom agreements with multinationals. These erode the taxable base in a way that has no link with reality whatsoever. That goes against OECD and EU principles. [0] https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement [1] https://www.nytimes.com/2016/08/31/technology/apple-tax-eu-ireland.html https://www.nytimes.com/2016/08/31/technology/apple-tax-eu-i...