8 ms·

Good for them. France and Germany take endless steps to protect their domestic economic interests regardless of what any EU legislation or sense of fairness say

Good for them. France and Germany take endless steps to protect their domestic economic interests regardless of what any EU legislation or sense of fairness says, Ireland is well within their rights to do the same.

digianarchist 8y ago
Ireland have already been given some lucky charms by the EU. For example, they were given permission to set their corporate taxes to a ridiculously low 12.5%.
- rusk 8y ago
  Spoken like somebody who knows very little about the topic. The effective tax rate is far lower than this, but also, most countries have an effective tax rate for megacorps far lower than what they advertise once exemptions, subsidies and tax-breaks come into play.
  - dbdjfjrjvebd 8y ago
    Yes but a lot of that is done by allowing large companies to offshore their profits.
    - rusk 8y ago
      No, that's not completely true. It's a part of the picture but there's plenty more strokes going on than that.
      - dbdjfjrjvebd 8y ago
        Hence "a lot" which allows for other processes. We agree.
        rusk 8y ago
        To me “a lot” signifies “most of” which I think understated the amount of other skullduggery going on.
  - vetinari 8y ago
    The difference is, that the Irish rate applies to any business taxing its income in Ireland. It doesn't have to be a megacorp, they do not have to have special relations to get subsidies or tax breaks. It may be your company, if your registered and operate it there. That's not the case in other EU countries.
    - rusk 8y ago
      The difference is, that the Irish rate applies Speaking as an Irish resident, I can tell you that this is effectively untrue. Indigenous businesses, or even businesses small enough to not get the sweetheart treatment of the relevant authorities definitely do not get equal treatment. The difference is vast.
      - oarsinsync 8y ago
        Are you suggesting that indigenous and/or small businesses are taxed at a higher rate than the published standard 12.5%, or that they don't qualify for even better exemptions and thus lower effective rates than 12.5%? GP was indicating that Ireland has one of the lowest standard corporation taxes at 12.5% available to everyone, not that there aren't even better effective rates offered to larger corps & multinationals.
        rusk 8y ago
        Yes I’m stating that as an absolute fact.
        oarsinsync 8y ago
        Can you provide any evidence, as everything I can see shows 12.5% on trading income, and 25% on non-trading income. Are you referring to the non-trading income corporation tax rate, or is there something else going on? If something else, that sounds an awful lot like corruption
        rusk 8y ago
  - rusk 8y ago
    That's not to mention the impact that the US tax system has allowing megacorps defer and arbitrate their tax obligations, which effectively lets them pay even less than that
- nradov 8y ago
  Why would a sovereign state even need permission from others about purely internal matters such as corporate income tax rates?
  - foepys 8y ago
    Because they are a member of the EU, a trade union that evolved into much more. They can choose to leave and also lose all their tech HQs that are only located there because Ireland is part of the EU.
    - nradov 8y ago
      That's simply false. The current EU membership terms don't grant it oversight of member state corporate tax rates.
      - matt4077 8y ago
        But it does provide for rather strict limits on subsidies, and a subsidy is indistinguishable (or, actually, defined as, among other things) making one-off tax deals with individual companies.
  - calcifer 8y ago
    Because it's not a purely internal matter when you have the Single Market. You know, the one they have willingly and knowingly signed up to?
    - donaltroddyn 8y ago
      Ireland's corporation tax rate is purely an internal matter, even in the single market. In fact, Ireland rejected by referendum the Lisbon Treaty in 2008, and only voted for it the following year after a series of clauses known as the Irish Guarantees were added. One of those guarantees is: > Nothing in the Treaty of Lisbon makes any change of any kind, for any Member State, to the extent or operation of the competence of the European Union in relation to taxation. It's legally binding, and ensures that Ireland retained the right to set our its corporation tax rate. All the other EU nations at the time (some have joined since) unanimously ratified the Irish Guarantees, so if anything, it's rich of them to now complain about an agreement that they willingly and knowingly signed up to.
- adventured 8y ago
  It's an increasingly low corporate tax rate world. Ireland's rate is no longer as unusually low relative to other EU nations as it used to. The average EU corporate tax rate is getting close to being in the teens. For example: Hungary 9%, Bulgaria 10%, Lithuania 15%, Romania 16%, Croatia 18%, Poland 19%, Czech 19%, Slovenia 19%, UK 19%, Estonia 20%, Finland 20%, Latvia 20% Even Denmark is at 22% and Norway is at 23%, traditionally high tax countries. Outside the EU in Europe you have Montenegro 9%, Macedonia 10%, Bosnia 10%, Serbia 15%, Georgia 15%, Albania 15%, Belarus 18%, Russia 20%, Armenia 20%. Another decade of rate competition and the EU average might be down to something close to 18%. The real unusual stand-outs these days are the high total rate nations, like France, Belgium, Greece and Germany, rather than the low rate nations.
  - ionised 8y ago
    I don't think the popularity of these low rates is a justification. It just highlights how it has become a race to the bottom.
    - logifail 8y ago
      Regarding multinationals which might place their EU "tax address" in any of 28 countries, those countries which choose to set low taxation rates have (logically) decided they would rather attempt to have a low percentage of something than get a higher percentage of nothing at all. Q: How many companies would site a corporate office in Luxembourg if there were no tax advantage?
- adam_klein 8y ago
  Not given but negotiated, as a part of EU treaties. Similarly to the subsidies for French farmers or the access to Irish waters for Spanish fishermen.
  - matt4077 8y ago
    All nationalistic jingoism aside, it's pretty hard to deny that Ireland reaped huge profits from EU membership. Considering it started as one of the poorest countries of Europe when it joined in the 1970s, subsequently received billions in direct transfers plus favorable conditions as outlined above, and today is among the richest countries in the world. That's not to diminish Ireland's accomplishments in the least. The combination of a well-educated population and speaking (something akin to) the English language alone made them predestined to catch up eventually. Being able to engage with their former enemies in the Good Friday Agreement was also exemplary and undoubtedly returned fantastic dividends, both economically as well as morally. But to deny that being part of the world's largest free trade block was an essential part, or to insist that when Ireland joined 40 years ago the EU was expecting, and motivated by, any short-term financial interests just seems...unnecessary petty? Because there's nothing dishonorable in that story. Nor are those two aspects contradictory. Germany does pretty well with an origin story far darker: not only to have started far lower than Ireland has ever been, and receiving far more support at a time where the idea of short-term returns were laughable (the Marshall Plan). But to have caused that same miserable situation pretty much single-handedly, and being the recipient of gratuitous support by essentially the same countries they had devastated in that mad crusade less than a decade prior.
- tomatocracy 8y ago
  Permission? Lucky them having to ask permission to set their own tax policy.
  - pbhjpbhj 8y ago
    - "p̶e̶r̶m̶i̶s̶s̶i̶o̶n̶ ̶t̶o̶ ̶s̶e̶t̶ ̶t̶h̶e̶i̶r̶ ̶o̶w̶n̶ ̶t̶a̶x̶ ̶p̶o̶l̶i̶c̶y̶" + "permission to screw over the other countries they're in economic union with by acting as a tax haven for transactions that occur in those other countries"
this_user 8y ago
> France and Germany take endless steps to protect their domestic economic interests It's not even that in this case, because it's not like there are serious European competitors to these companies (except maybe the odd Samwer clone here and there) that could even be protected. This is purely an attempt to rip these companies off, because the governments can.
- moorhosj 8y ago
  The flip side of this argument is that the companies are ripping the countries off by using myriad tax loopholes, because they can. I find it interesting that the companies are often portrayed as smart for doing this, but politicians are jealous and incompetent. Almost like we worship businesses and malign government. I wonder whose interests that viewpoint supports.
  - pembrook 8y ago
    >but politicians are jealous and incompetent ...well they did create these tax loopholes in the first place. That’s pretty much the definition of incompetence. So are you arguing that corporations should pay more tax than they are legally required as a gift of charity to countries? If so, how much? What if a competitor decides to pay less?
    - arbitrary_name 8y ago
      Corporates likely helped shape those loopholes, and viciously fought the legislation the entire way. Let's not pretend these corps are innocent victims here.
    - moorhosj 8y ago
      The politicians in the US, Germany and France didn’t create the loopholes tech companies use in Ireland. The globalization of business is what allows maneuvers like the “Dutch Sandwich”. Taxation hasn’t really adjusted to this type of international tax avoidance. It will likely be a prominent discussion over the next 20 years based on the Panama Papers.
  - 8y ago

digianarchist 8y ago

Ireland have already been given some lucky charms by the EU. For example, they were given permission to set their corporate taxes to a ridiculously low 12.5%.

rusk 8y ago
Spoken like somebody who knows very little about the topic. The effective tax rate is far lower than this, but also, most countries have an effective tax rate for megacorps far lower than what they advertise once exemptions, subsidies and tax-breaks come into play.
- dbdjfjrjvebd 8y ago
  Yes but a lot of that is done by allowing large companies to offshore their profits.
  - rusk 8y ago
    No, that's not completely true. It's a part of the picture but there's plenty more strokes going on than that.
    - dbdjfjrjvebd 8y ago
      Hence "a lot" which allows for other processes. We agree.
      - rusk 8y ago
        To me “a lot” signifies “most of” which I think understated the amount of other skullduggery going on.
- vetinari 8y ago
  The difference is, that the Irish rate applies to any business taxing its income in Ireland. It doesn't have to be a megacorp, they do not have to have special relations to get subsidies or tax breaks. It may be your company, if your registered and operate it there. That's not the case in other EU countries.
  - rusk 8y ago
    The difference is, that the Irish rate applies Speaking as an Irish resident, I can tell you that this is effectively untrue. Indigenous businesses, or even businesses small enough to not get the sweetheart treatment of the relevant authorities definitely do not get equal treatment. The difference is vast.
    - oarsinsync 8y ago
      Are you suggesting that indigenous and/or small businesses are taxed at a higher rate than the published standard 12.5%, or that they don't qualify for even better exemptions and thus lower effective rates than 12.5%? GP was indicating that Ireland has one of the lowest standard corporation taxes at 12.5% available to everyone, not that there aren't even better effective rates offered to larger corps & multinationals.
      - rusk 8y ago
        Yes I’m stating that as an absolute fact.
        oarsinsync 8y ago
        Can you provide any evidence, as everything I can see shows 12.5% on trading income, and 25% on non-trading income. Are you referring to the non-trading income corporation tax rate, or is there something else going on? If something else, that sounds an awful lot like corruption
        rusk 8y ago
- rusk 8y ago
  That's not to mention the impact that the US tax system has allowing megacorps defer and arbitrate their tax obligations, which effectively lets them pay even less than that
nradov 8y ago
Why would a sovereign state even need permission from others about purely internal matters such as corporate income tax rates?
- foepys 8y ago
  Because they are a member of the EU, a trade union that evolved into much more. They can choose to leave and also lose all their tech HQs that are only located there because Ireland is part of the EU.
  - nradov 8y ago
    That's simply false. The current EU membership terms don't grant it oversight of member state corporate tax rates.
    - matt4077 8y ago
      But it does provide for rather strict limits on subsidies, and a subsidy is indistinguishable (or, actually, defined as, among other things) making one-off tax deals with individual companies.
- calcifer 8y ago
  Because it's not a purely internal matter when you have the Single Market. You know, the one they have willingly and knowingly signed up to?
  - donaltroddyn 8y ago
    Ireland's corporation tax rate is purely an internal matter, even in the single market. In fact, Ireland rejected by referendum the Lisbon Treaty in 2008, and only voted for it the following year after a series of clauses known as the Irish Guarantees were added. One of those guarantees is: > Nothing in the Treaty of Lisbon makes any change of any kind, for any Member State, to the extent or operation of the competence of the European Union in relation to taxation. It's legally binding, and ensures that Ireland retained the right to set our its corporation tax rate. All the other EU nations at the time (some have joined since) unanimously ratified the Irish Guarantees, so if anything, it's rich of them to now complain about an agreement that they willingly and knowingly signed up to.
adventured 8y ago
It's an increasingly low corporate tax rate world. Ireland's rate is no longer as unusually low relative to other EU nations as it used to. The average EU corporate tax rate is getting close to being in the teens. For example: Hungary 9%, Bulgaria 10%, Lithuania 15%, Romania 16%, Croatia 18%, Poland 19%, Czech 19%, Slovenia 19%, UK 19%, Estonia 20%, Finland 20%, Latvia 20% Even Denmark is at 22% and Norway is at 23%, traditionally high tax countries. Outside the EU in Europe you have Montenegro 9%, Macedonia 10%, Bosnia 10%, Serbia 15%, Georgia 15%, Albania 15%, Belarus 18%, Russia 20%, Armenia 20%. Another decade of rate competition and the EU average might be down to something close to 18%. The real unusual stand-outs these days are the high total rate nations, like France, Belgium, Greece and Germany, rather than the low rate nations.
- ionised 8y ago
  I don't think the popularity of these low rates is a justification. It just highlights how it has become a race to the bottom.
  - logifail 8y ago
    Regarding multinationals which might place their EU "tax address" in any of 28 countries, those countries which choose to set low taxation rates have (logically) decided they would rather attempt to have a low percentage of something than get a higher percentage of nothing at all. Q: How many companies would site a corporate office in Luxembourg if there were no tax advantage?
adam_klein 8y ago
Not given but negotiated, as a part of EU treaties. Similarly to the subsidies for French farmers or the access to Irish waters for Spanish fishermen.
- matt4077 8y ago
  All nationalistic jingoism aside, it's pretty hard to deny that Ireland reaped huge profits from EU membership. Considering it started as one of the poorest countries of Europe when it joined in the 1970s, subsequently received billions in direct transfers plus favorable conditions as outlined above, and today is among the richest countries in the world. That's not to diminish Ireland's accomplishments in the least. The combination of a well-educated population and speaking (something akin to) the English language alone made them predestined to catch up eventually. Being able to engage with their former enemies in the Good Friday Agreement was also exemplary and undoubtedly returned fantastic dividends, both economically as well as morally. But to deny that being part of the world's largest free trade block was an essential part, or to insist that when Ireland joined 40 years ago the EU was expecting, and motivated by, any short-term financial interests just seems...unnecessary petty? Because there's nothing dishonorable in that story. Nor are those two aspects contradictory. Germany does pretty well with an origin story far darker: not only to have started far lower than Ireland has ever been, and receiving far more support at a time where the idea of short-term returns were laughable (the Marshall Plan). But to have caused that same miserable situation pretty much single-handedly, and being the recipient of gratuitous support by essentially the same countries they had devastated in that mad crusade less than a decade prior.
tomatocracy 8y ago
Permission? Lucky them having to ask permission to set their own tax policy.
- pbhjpbhj 8y ago
  - "p̶e̶r̶m̶i̶s̶s̶i̶o̶n̶ ̶t̶o̶ ̶s̶e̶t̶ ̶t̶h̶e̶i̶r̶ ̶o̶w̶n̶ ̶t̶a̶x̶ ̶p̶o̶l̶i̶c̶y̶" + "permission to screw over the other countries they're in economic union with by acting as a tax haven for transactions that occur in those other countries"

this_user 8y ago

> France and Germany take endless steps to protect their domestic economic interests It's not even that in this case, because it's not like there are serious European competitors to these companies (except maybe the odd Samwer clone here and there) that could even be protected. This is purely an attempt to rip these companies off, because the governments can.

moorhosj 8y ago
The flip side of this argument is that the companies are ripping the countries off by using myriad tax loopholes, because they can. I find it interesting that the companies are often portrayed as smart for doing this, but politicians are jealous and incompetent. Almost like we worship businesses and malign government. I wonder whose interests that viewpoint supports.
- pembrook 8y ago
  >but politicians are jealous and incompetent ...well they did create these tax loopholes in the first place. That’s pretty much the definition of incompetence. So are you arguing that corporations should pay more tax than they are legally required as a gift of charity to countries? If so, how much? What if a competitor decides to pay less?
  - arbitrary_name 8y ago
    Corporates likely helped shape those loopholes, and viciously fought the legislation the entire way. Let's not pretend these corps are innocent victims here.
  - moorhosj 8y ago
    The politicians in the US, Germany and France didn’t create the loopholes tech companies use in Ireland. The globalization of business is what allows maneuvers like the “Dutch Sandwich”. Taxation hasn’t really adjusted to this type of international tax avoidance. It will likely be a prominent discussion over the next 20 years based on the Panama Papers.
- 8y ago