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Ireland's corporate tax rate is 12.5% which is in the lower half of the table of EU rates but that's no basis to brand it a "tax haven". People get riled up be

by derriz 9y ago

Ireland's corporate tax rate is 12.5% which is in the lower half of the table of EU rates but that's no basis to brand it a "tax haven". People get riled up because of an exclusively American twist to their corporate tax rule which allows American companies to defer paying US corporate tax on foreign earnings until the money is "repatriated". This is why you never see UK, German, Japanese, etc. companies use Ireland as a tax "haven". Ireland follows international law in taxing multinationals on the profits generated in Ireland. When you hear a claim along the lines of "Apple only pays 2% on its revenues in Ireland", it's because the vast majority of the profit is taxable in the US not in Ireland but payment is deferred because of this US tax loophole. Just because the cash hasn't been handed over to Uncle Sam, doesn't mean it isn't due. It's perfectly understandable that the US government is unhappy at this attempt by a foreign government to grab corporate tax which by all international standards belongs to the US treasury. If the EU (and I'm a proud European) wants a share of digital tax, then they should grow their own profitable tech companies to tax instead of selectively eyeing up US tech companies. The US doesn't get to impose corporate tax on German car makers or French wine producers - nor should the EU get to impose a corporate tax on US tech companies.

FigBug 9y ago
On car makers or wine producers the US can impose import duties i.e. 25% on light trucks. There is no equivalent to import duties for online businesses, hence this tax plan.
- derriz 9y ago
  Sure every country can just impose duties on imports. But it's an impoverishing move for the planet. The last time every country believed this was a good idea was in the 1930s and it lead to economic devestation and arguably contributed to WW2.
mdekkers 9y ago
The US doesn't get to impose corporate tax on German car makers or French wine producers Yes they do, they are called import and excise duties, and they currently don't apply to services, which is what the EU is going after.
- derriz 9y ago
  I agree that the tax is more like a duty or tariff despite being sold as an attempt to correct a corporate tax loophole. The reason it is not marketed as such is because it makes it obvious who will actually pay the tax - the consumers of the products.
  - JanSt 9y ago
    All taxes are paid by the consumer of the products, always. This is trying to fix the gap in taxes companies have to pay. Why does Amazon pay less taxes than a 3-person book shop? Do you deem that appropriate?
    - AstralStorm 9y ago
      Better that than the tax being shifted to externalities like environmental cost, social costs or corruption. (The most insidious cost is by starving public infrastructure such as education and transportation.)
  - mdekkers 9y ago
    it makes it obvious who will actually pay the tax - the consumers of the products I'm not sure you understand how taxation works. Tax is always paid by the consumer, one way or the other. If the Government would show up on your doorstep one day and demand, in a single payment, all the money they suck out of you over the course of a year - directly or indirectly - as a lump sum, there would be a swift, brutal and extremely violent revolution. I am not sure of the exact percentage, but I suspect that about 60 to 70% of our money eventually ends up with the Government. On top of that, our pension funds are being raided and drained, social services are in rapid and consistent decline since the 70's - not just direct social security, but also healthcare, education, safety and security, etc. Where does the money go? I look around, and pretty much the only place I see real, serious money flow into instead of out is war, or distracting people from all the money that is going into war. There is a direct correlation between the slow, inexorable rise in taxation, decline of social services, and increase in military spending. And it isn't like we didn't know: https://www.npr.org/2011/01/17/132942244/ikes-warning-of-military-expansion-50-years-later https://www.npr.org/2011/01/17/132942244/ikes-warning-of-mil... This is what Robert Gates had to say: "Does the number of warships we have, and are building, really put America at risk, when the U.S. battle fleet is larger than the next 13 navies combined — 11 of which are our partners and allies? Is it a dire threat that by 2020, the United States will have only 20 times more advanced stealth fighters than China?" We are all being played, and it is a game that has been played since the first caveman picked up a rock and brained the guy next to him for a better spot at the watering hole.
DangerousPie 9y ago
As far as I can tell the corporate tax in Ireland the 2nd lowest in the EU, with only Bulgaria being lower. Calling that "in the lower half" is reaching a bit, isn't it?
JanSt 9y ago
Except they don't pay 12.5%. Apple paid 0.005% in 2014. https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiaries-paid-a-0005-percent-tax-rate-in-2014.html https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiarie... "When you hear a claim along the lines of "Apple only pays 2% on its revenues in Ireland", it's because the vast majority of the profit is taxable in the US not in Ireland" No, this is not the reason. They pay an incredible low tax rate for all EU profit because of special illegal deals.
- derriz 9y ago
  That’s not a fair comparison. You don’t pay corporate tax based on a percentage of turnover so your rate has nothing to do with corporate tax rates. They pay Irish corporate tax on profits generated by their operations in Ireland which are understandably a tiny fraction of their sales in Europe. The rest is taxable in the US and in fact Apple have recently started repatriating foreign profits to the US and are paying US corporate tax on them.
  - JanSt 9y ago
    No, you don't understand the system at all First, they shift all profit to Ireland as "licensing costs" for intellectual property. Next: "Ordinarily, those profits would be taxed in Ireland at the relatively low rate of 12.5 percent but — thanks to an agreement between Apple and Ireland — the vast majority of profits in Ireland were attributed to a "head office" not located in any country and therefore not subject to taxes in Ireland or anywhere." https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiaries-paid-a-0005-percent-tax-rate-in-2014.html https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiarie...
    - derriz 9y ago
      You’re contradicting yourself - they cannot simultaneously shift all profits to Ireland and to a non-Irish head office. They split the profits on their international sales channeled through Ireland between both. The non-Irish profits are taxable by the US which is why the US government is fighting the EU over this as they rightly (in my opinion) see it as a money grab.
_0ffh 9y ago
I think a major point of contention is still if the Irish made special accommodations for Apple. The European Commission claims so, and it doesn't seem a far-fetched accusation [1]. The Irish government still energetically denies it [2]. [1] http://www.businessinsider.de/how-apple-managed-to-get-its-tax-deal-in-ireland-in-1991-2016-8?r=UK&IR=T http://www.businessinsider.de/how-apple-managed-to-get-its-t... [2] https://www.rte.ie/news/ireland/2018/0125/935933-leo-varadkar-apple-tax/ https://www.rte.ie/news/ireland/2018/0125/935933-leo-varadka...
markvdb 9y ago
> Ireland's corporate tax rate is 12.5% which is in the lower half of the table of EU rates but that's no basis to brand it a "tax haven". Things like https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement and https://en.wikipedia.org/wiki/Criticism_of_Apple_Inc.#Tax_practices https://en.wikipedia.org/wiki/Criticism_of_Apple_Inc.#Tax_pr... are.

by derriz 9y ago

FigBug 9y ago

On car makers or wine producers the US can impose import duties i.e. 25% on light trucks. There is no equivalent to import duties for online businesses, hence this tax plan.

derriz 9y ago
Sure every country can just impose duties on imports. But it's an impoverishing move for the planet. The last time every country believed this was a good idea was in the 1930s and it lead to economic devestation and arguably contributed to WW2.

mdekkers 9y ago

The US doesn't get to impose corporate tax on German car makers or French wine producers Yes they do, they are called import and excise duties, and they currently don't apply to services, which is what the EU is going after.

derriz 9y ago
I agree that the tax is more like a duty or tariff despite being sold as an attempt to correct a corporate tax loophole. The reason it is not marketed as such is because it makes it obvious who will actually pay the tax - the consumers of the products.
- JanSt 9y ago
  All taxes are paid by the consumer of the products, always. This is trying to fix the gap in taxes companies have to pay. Why does Amazon pay less taxes than a 3-person book shop? Do you deem that appropriate?
  - AstralStorm 9y ago
    Better that than the tax being shifted to externalities like environmental cost, social costs or corruption. (The most insidious cost is by starving public infrastructure such as education and transportation.)
- mdekkers 9y ago
  it makes it obvious who will actually pay the tax - the consumers of the products I'm not sure you understand how taxation works. Tax is always paid by the consumer, one way or the other. If the Government would show up on your doorstep one day and demand, in a single payment, all the money they suck out of you over the course of a year - directly or indirectly - as a lump sum, there would be a swift, brutal and extremely violent revolution. I am not sure of the exact percentage, but I suspect that about 60 to 70% of our money eventually ends up with the Government. On top of that, our pension funds are being raided and drained, social services are in rapid and consistent decline since the 70's - not just direct social security, but also healthcare, education, safety and security, etc. Where does the money go? I look around, and pretty much the only place I see real, serious money flow into instead of out is war, or distracting people from all the money that is going into war. There is a direct correlation between the slow, inexorable rise in taxation, decline of social services, and increase in military spending. And it isn't like we didn't know: https://www.npr.org/2011/01/17/132942244/ikes-warning-of-military-expansion-50-years-later https://www.npr.org/2011/01/17/132942244/ikes-warning-of-mil... This is what Robert Gates had to say: "Does the number of warships we have, and are building, really put America at risk, when the U.S. battle fleet is larger than the next 13 navies combined — 11 of which are our partners and allies? Is it a dire threat that by 2020, the United States will have only 20 times more advanced stealth fighters than China?" We are all being played, and it is a game that has been played since the first caveman picked up a rock and brained the guy next to him for a better spot at the watering hole.

DangerousPie 9y ago

As far as I can tell the corporate tax in Ireland the 2nd lowest in the EU, with only Bulgaria being lower. Calling that "in the lower half" is reaching a bit, isn't it?

JanSt 9y ago

Except they don't pay 12.5%. Apple paid 0.005% in 2014. https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiaries-paid-a-0005-percent-tax-rate-in-2014.html https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiarie... "When you hear a claim along the lines of "Apple only pays 2% on its revenues in Ireland", it's because the vast majority of the profit is taxable in the US not in Ireland" No, this is not the reason. They pay an incredible low tax rate for all EU profit because of special illegal deals.

derriz 9y ago
That’s not a fair comparison. You don’t pay corporate tax based on a percentage of turnover so your rate has nothing to do with corporate tax rates. They pay Irish corporate tax on profits generated by their operations in Ireland which are understandably a tiny fraction of their sales in Europe. The rest is taxable in the US and in fact Apple have recently started repatriating foreign profits to the US and are paying US corporate tax on them.
- JanSt 9y ago
  No, you don't understand the system at all First, they shift all profit to Ireland as "licensing costs" for intellectual property. Next: "Ordinarily, those profits would be taxed in Ireland at the relatively low rate of 12.5 percent but — thanks to an agreement between Apple and Ireland — the vast majority of profits in Ireland were attributed to a "head office" not located in any country and therefore not subject to taxes in Ireland or anywhere." https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiaries-paid-a-0005-percent-tax-rate-in-2014.html https://www.cnbc.com/2016/08/30/how-apples-irish-subsidiarie...
  - derriz 9y ago
    You’re contradicting yourself - they cannot simultaneously shift all profits to Ireland and to a non-Irish head office. They split the profits on their international sales channeled through Ireland between both. The non-Irish profits are taxable by the US which is why the US government is fighting the EU over this as they rightly (in my opinion) see it as a money grab.

_0ffh 9y ago

I think a major point of contention is still if the Irish made special accommodations for Apple. The European Commission claims so, and it doesn't seem a far-fetched accusation [1]. The Irish government still energetically denies it [2]. [1] http://www.businessinsider.de/how-apple-managed-to-get-its-tax-deal-in-ireland-in-1991-2016-8?r=UK&IR=T http://www.businessinsider.de/how-apple-managed-to-get-its-t... [2] https://www.rte.ie/news/ireland/2018/0125/935933-leo-varadkar-apple-tax/ https://www.rte.ie/news/ireland/2018/0125/935933-leo-varadka...

markvdb 9y ago

> Ireland's corporate tax rate is 12.5% which is in the lower half of the table of EU rates but that's no basis to brand it a "tax haven". Things like https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement and https://en.wikipedia.org/wiki/Criticism_of_Apple_Inc.#Tax_practices https://en.wikipedia.org/wiki/Criticism_of_Apple_Inc.#Tax_pr... are.