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Does anyone have more context on why Ireland's loophole will take so long to close? I suspect they're worried about externalities and retooling costs for entit
by iaw 9y ago
Does anyone have more context on why Ireland's loophole will take so long to close? I suspect they're worried about externalities and retooling costs for entities obeying the spirit of tax law but it seems like they could put monetary thresholds that lower yearly rather than an all or nothing in 2020.
e.g. Why not say "new tax code applies to any company doing >$1B worth of business in 2018, >$500M in 2019, and all companies in 2020?"
Just curious if there's well-thought out reasons that this doesn't work.
- charlesdm 9y agoLoopholes do not exist. There is only the law (and people who are smart enough to figure out a way to place themselves outside of the application of said law). Generally the EU gives member states the right to grandfather certain arrangements because it would be hard to restructure everything in a few months. Most countries use a 3 or 4 year grandfathering period. The same thing applies to the old IP regime (IP income is 80% exempt from corporate tax) that exists in Luxembourg. Google will just rearrange their affairs, like Apple has, to avoid taxation. It doesn't really matter -- there always tends to be another way.
- deadmetheny 9y agoThese loopholes abuse the tax codes of multiple nations. They absolutely are loopholes that ignore the spirit of the law.
- charlesdm 9y agoHonestly, to me, the law has no spirit. The law having a spirit would mean we have to depend on ethical beliefs, and those can be wildly different for every person and/or company. What seems like an acceptable rate of taxation to pay for person A seems outrageous for B, and both rates would probably seem outrageous anyway to both those people if they have to pay those abroad (e.g. not in the home country of the main shareholders) Let's just stick to the letter of the law -- things are complicated enough as is. Edit: and for those who haven't noticed, member states introduce some of these "loopholes" on purpose in order to attract incoming investment. For example: there is a reason the Netherlands does not levy withholding taxes on 1) royalties and 2) outgoing dividends. They do this so people and companies would book some profit there so they can then tax it.
- glitcher 9y ago> the law has no spirit. The law having a spirit would mean we have to depend on ethical beliefs The law is also not a set of boolean logic statements. The "spirit" is just a way of acknowledging that language is imprecise at best, and often laws are poorly written to begin with.
- alphaalpha101 9y agoYou are simply wrong. The spirit of the law does exist. It's a concept well established in legal analysis.
- nikanj 9y agoIt’s really hard to answer questions like this with anything other than ”status quo benefits the rich”.
- rocqua 9y agoThis source (in Dutch sadly) [1] might shed some light. In short a `coalition of the unwilling' consisting of The Netherlands, Ireland, Cyprus, Malta and Luxemburg are impeding tax reform. In public they talk the good talk. Behind the sense they stall under the guise 'Need to ensure proper implementation'. [1] https://nos.nl/artikel/2206095-nederland-ligt-nog-altijd-dwars-bij-eu-aanpak-belastingontwijking.html https://nos.nl/artikel/2206095-nederland-ligt-nog-altijd-dwa...
- iaw 9y agoThank you! That explains a lot about what's going on.