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Ireland joins OECD International Tax agreement
- deleted 5y ago[deleted]
- threatofrain 5y ago> Global minimum effective corporation tax rate of 15% for multinationals with revenues in excess of €750 million > No change to the 12.5% rate for businesses with revenues below €750 million
- harikb 5y agoHopefully 15% is for ( Total - 750 )
- LudwigNagasena 5y agoCompanies generally aren’t taxed on revenue.
- Maarten88 5y agoVAT comes close to that and is common outside US.
- seoaeu 5y agoTotal and $750M aren't even the same unit. The former is profit, while the latter is revenue.
- harikb 5y agoI meant would it incentivize a 749 revenue company to lose money to save on the 2.5% extra tax
- alex_young 5y agoWhat you're describing is called a Progressive Tax system: https://en.wikipedia.org/wiki/Progressive_tax https://en.wikipedia.org/wiki/Progressive_tax
- zdragnar 5y agoMost progressive tax systems only have you pay the higher rated on the amount in that bracket to avoid the disincentive. More accurately, this is a form of alternative minimum tax- a higher floor than the normal brackets specifically for those who cross a specific threshold. That does carry a hefty incentive to play games with your accounting, and is ultimately rather foolish since the people it was really aimed at when introduced in the US shifted their income to capital gains instead. Now, it is mostly a way to punish people for becoming upper middle class.
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- seoaeu 5y agoThey wouldn't have to lose money, just avoid taking in additional revenue. An incentive certainly, but far from the worst in the tax code. Personally, I think the tax rate should be higher than 15% for all corporations so I'm not so worried that a company might miss out on an even better deal of 12.5%, but I see the concern that a small change in revenue might change their tax bill by millions.
- m0zg 5y agoIreland is about to discover how unattractive it is as a locale for multinational HQs when the playing field is somewhat more level. And I'm in favor of the move as a middle class US taxpayer and a small business owner who pays through the nose, but this is a quite obvious self-own in the long run for them, much for the same reason why introducing a wealth tax was a self-own for France. Big Money is mobile, sophisticated, and quick on its feet.
- munk-a 5y agoSure - but it's the process of making the world a better place. The more these tax havens get shut down the fewer (and riskier) places that corporations have to shelter their revenue.
- lettergram 5y agoYeah because governments use those funds so effectively. It’s why when I look around the U.S. at the trillions we spent over the last two decades and I see... well looks pretty much the same as the 90s honestly
- munk-a 5y agoSorry, because governments spend money inefficiently we should just allow rampant corruption? That's an insanely fatalist view to take.
- m0zg 5y agoGovernment is the primary enabler of corruption in the first place. Don't know how it is in Ireland, but in the United States I can't really see it serving any other function at the moment. It abdicated all its responsibilities entirely, and for the past several decades it's been working only for its donors, not constituents. I would be surprised if Ireland is any better.
- Maarten88 5y ago
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- munk-a 5y agoI've always been baffled as to how this is seen as a multi-national issue. The US could always implement unilateral minimum VAT and profit[3] taxes on corporations forcing them to effectively pay whatever proportion the US demands to continue doing business in the world's largest consumer market. Just because you're only paying 3%[1] profit[3] tax in Bermuda doesn't mean you can necessarily skate around the remaining 12% when doing business in the US - the US could just pocket that additional 12% if nobody else wanted it. Implement a policy like that and the competitive tax advantage of havens disappears overnight and all this BS disappears. We[2] have tax loopholes because we want to continue to have tax loopholes. 1. BS example I'm unfamiliar with the actual numbers. 2. Where "We" is lawmakers or maybe society as a whole as weighted by political power. 3. Edited: s/revenue/profit/
- Brakenshire 5y agoGovernments want to tax profits rather than revenues. A tax on revenues would kill a lot of high growth businesses.
- jgeada 5y agoAnd yet they tax individuals on our revenues and not our profits …
- mkoryak 5y agoBut individuals aren't high growth businesses with lobbyists
- _-david-_ 5y agoNot completely. You can get some deductions for various expenses like housing and medical. It is not fully a tax on revenue.
- munk-a 5y agoThere are definitely expenses you can incur that result in either a taxable income reduction or a tax deduction - there aren't many of them (most individual expenditures aren't considered expenses in the way that profits are measured) - but there are some. As an example in Canada one newly recognized tax exemption for 2020 was a 400$ flat tax deduction for remote working. You can argue that more tax burden should be shifted initially to corporations but I think that expenses and taxes have aligned in a way that makes a predominantly revenue based individual tax fair - corporations could also easily carry revenue based taxes, some low margin business would become infeasible but every economic policy shifts that line in some manner.
- Proven 5y agoEffective rate remains 0-5%. Take that, globalists!
- busymom0 5y agoI have never understood the whole "tax the rich" idea and I am not rich, don't own a house or car or stocks or anything expensive. When and how will the taxes help you and me? The money just ends up going to a black hole for the government to spent inefficiently. And if you are in the US, the money gets spent on funding the military industrial complex for bombing more countries, regime changes, intelligence agencies, sent to other countries for random gibberish studies and hiring more admin or useless jobs. I would recommend listening to the first few minutes of this "Walmart vs. The Morons" video to understand how inefficient the government really is: https://youtu.be/oKFdAOKq4Lk https://youtu.be/oKFdAOKq4Lk
- debdut 5y agowonderful video! learnt something today :)
- yesenadam 5y ago(I'm not in the US, and agree that that's a disgraceful list.) Inefficient compared to what? What is your proposed alternative? > When and how will the taxes help you and me? Well.. for example, you use roads I assume.
- SamPatt 5y agoThe vast majority of roads are managed at the state and local level. The overall expenditure for roads at the federal level is a very small portion of the budget.
- Geee 5y agoWhy is busymom0's comment flagged and dead? There's nothing that breaks HN rules in that comment. Lately I've seen completely appropriate arguments on HN being flagged, why is that?
- bootloop 5y agoThere is not really an argument in their comment is there? It's pooling random facts together. You wouldn't be able to engage into a discourse because you can't start anywhere. If your country is not designed to have taxes and do anything usefull with it you can't take it as an example how the "system wouldn't work if this one part would be different".
- boulos 5y agoYou can 'vouch' a comment, if you want to get it unflagged.
- _jal 5y agoI haven't voted on it, but it looks like astroturf/spam to me.
- Geee 5y agoWhy? It's a perfectly fine comment on the topic of taxes.
- foerbert 5y agoThere's no way it's a genuine comment from somebody that has given the topic enough of a passing thought to actually comment on it. The sheer number of things everybody interacts with everyday that are very directly related to tax-funded government actions is immense, and very blatantly so. Yet they lead with "what have taxes ever done for anybody?" It's not a genuine or honest comment.
- deleted 5y ago[deleted]
- sgjohnson 5y agoSurely all this does is makes offshore tax havens all the more attractive? Sure, some of them have signed up (i.e. Panama), but if they are not ditching the territorial taxation system, it changes absolutely nothing for them, and even if it would, Panama absolutely does not care about enforcing the exising law regarding taxation. Sure, the companies will have to pay a bit more to their lawyers, but the way I see it, is that all it does is making offshores even more attractive.
- gruez 5y ago>Surely all this does is makes offshore tax havens all the more attractive? assuming they don't get sanctioned and/or tarrifed.
- lm28469 5y agoI'm no expert but as I understand there are benefits from having an EU based entity when you sell your goods/services in the EU. For example I doubt airbnb could pull its Ireland trick on EU countries from Panama (otherwise they'd already be doing it) https://news.in-24.com/business/167774.html https://news.in-24.com/business/167774.html
- collectedparts 5y agoMy take on this is that Ireland is now willing to come into compliance because post-Brexit, they now have a monopoly on "urban core that could sustain an HQ for multinationals in a natively-English-speaking country in the EU." In other words, they relied on tax advantages as a differentiator for companies to choose Dublin over London for their EU HQ. But now, what would you choose if not Dublin? Obviously Paris and Berlin are candidates but if you're a straightforward multinational, or certainly a company that is actually based/headquartered in the US, you're going to experience a lot less of a shock in a natively-English-speaking country. So it seems to be that Dublin wins now, tax advantage or no tax advantage. Which likely makes drawing the ire of other countries for being a "haven" less worth it.
- SSLy 5y agoIf you mention Berlin and Paris, then also Amsterdam and Warsaw deserve mentions.
- Pet_Ant 5y agoWarsaw? We’re becoming the Texas of Europe, more than a little unpalatable.
- JumpCrisscross 5y ago> We’re becoming the Texas of Europe This is a bad comparison. Texas is a rich, stable state with access to the U.S. federal court system and unambiguously subservient to the U.S. Poland is unchecked, unbalanced, and much, much poorer. Its lawless regime is legitimately popular, evoking comparisons to pre-collapse Russia and Venezuela. In an alternate timeline, Warsaw could have rivalled Berlin or Amsterdam. Not in ours.
- aardvarkr 5y agoThanks for speaking truth.
- kardianos 5y ago
- dzink 5y agoIt matters who is not in. Cyprus doesn’t seem to be on the list, along with many others. All it takes is one country to make this irrelevant.
- pmoleri 5y agoOnly if the joined countries don't implement some kind of differentiated tax on products and services commiting from outside the list.
- dzink 5y agoIf the earnings are attributed to the country of evasion, and it is secretive as they all always are, how does the country of residence even know or prove how much they need to tax. The pandora papers would not be so revealing if it wasn’t for the secrecy part.
- pmoleri 5y agoThe money is coming out of non-secretive countries, right? Eg. by end user credit cards o by 3rd companies buying ads or data.
- mattmanser 5y agoThey can add a new rate for products sold by companies in non-signing countries. "Paying" £1,000,000 for intellectual property in the virgin islands? There's a 12.5% tax on that, not VAT, so no, you can't offset it, thanks!
- vegai_ 5y agoThat's easy to fix, at least technically: punish financially all the countries who don't sign this. Just requires willingness to do this.
- IkmoIkmo 5y agoNo, it just matters if countries are willing to implement consequences for non-membership. And that's frankly a pretty trivial thing from a political and technical perspective, so I'm assuming it'll come. Various countries already have lists, e.g. the EU has lists for 'non-cooperative third-countries', which can be used by member states to add witholding taxes for transactions with these countries in-particular as a preemtive measure to reduce aggressive tax avoidance. Ireland is not joining this agreement for no reason, they're doing it because non-membership will hurt them more in the end.
- JaakkoP 5y agoThis is a shrewd move by Ireland. Multinational companies chose Ireland largely because: 1) Low tax basis 2) English speaking EU country 3) Part of the Euro zone (less important than #1 and #2 to be sure). Given the OECD tax agreement there are fewer low-tax destinations for companies to pick from. And because of Brexit there are no other English-speaking EU countries. Companies in Ireland aren’t going anywhere and it remains a pretty good option for any new HQs looking to expand into Europe. Ireland is just making more money off of each of them.
- space_rock 5y agoOf course. Cartels are always about reducing competition. Even if a cartel between countries like OPEC or this agreement. Irland just killed the competition
- bserge 5y agoCompetition killed itself a while ago. Wait, no, I think it's still bleeding out.
- legulere 5y agoThere’s still Malta with English as an official language inside the EU and Gibraltar is now part of Schengen area as a result of Brexit. Both are pretty small though.
- klausjensen 5y agoMalta is riddled with corruption and has no real banking options. It also has a very different legal system than IE/UK/US.
- tobylane 5y agoIreland has English style common law, familiar to Americans. Malta doesn’t.
- dougmwne 5y agoAll these greyed out comments about international taxation of all things really tells you something about the current state of the HN userbase and increasing political polarization. We even managed some completely off-topic insults of Texas and Poland. Fine work fellas!
- deleted 5y ago[deleted]
- sumedh 5y ago> current state of the HN userbase and increasing political polarization Probably because lot of people on HN are Americans and most of them know that the US govt loves to waste trillions of dollars of taxpayer money in pointless wars.
- hartator 5y agoIt will be good to focus in reopening most borders before moving forward with more bureaucratic agreement. The world is becoming a closed place where out of democratic reach bureaucrats are making most of the decisions.
- technick 5y agoMcKesson is screwed
- sharmin123 5y agoIs It Possible to Hire Hackers Online?: https://www.hackerslist.co/is-it-possible-to-hire-hackers-online/ https://www.hackerslist.co/is-it-possible-to-hire-hackers-on...
- dandotway 5y agoWith Hollywood Accounting[1], you make taxable profits transform into untaxable expenses that you pay to yourself for services you rendered to yourself, and Ireland has been a common destination for this sort of money to flow. Hollywood accounting can take several forms. In one form, a subsidiary is formed to perform a given activity and the parent entity will extract money out of the film's revenue in the form of charges for certain "services". For example, a film studio has a distribution arm as a sub-entity, which will then charge the studio a "distribution fee" — essentially, the studio charging itself a sum it has total control over and hence control the profitability report of a project. [1] https://en.wikipedia.org/wiki/Hollywood_accounting https://en.wikipedia.org/wiki/Hollywood_accounting Essentially, Apple USA makes billions selling iPhones in the USA, then pays those billions to Apple Ireland for the right to put little Apple logos on iPhones. Likewise, Google USA pays billions in US ad sales profits to Google Ireland for the right to use Google tech for Google search. When the Irish loophole closes I'm sure they'll think up another "One Weird Trick" to make taxable profits mystically transmute into untaxable expenses.
- colechristensen 5y agoProbably, but it does seem over the last twenty years there has been real actual effort to close loopholes. It is slow which can be frustrating, but we’re also talking about changing the way many businesses work and quite complex topics which are not always obviously right or wrong.
- eru 5y agoThe US can change their tax system, if they want to. Eg they could tax land value. It's very hard to move land out of the country or hide it. https://en.wikipedia.org/wiki/Land_value_tax https://en.wikipedia.org/wiki/Land_value_tax Or they could tax sales / consumption instead of trying to tax company profits. Company profits are just a bit too nebulous to tax properly. Eg you can reduce your profits just fine by shifting your capital structure from being financed by equity to being financed largely by debt. (And as we all know, too much leverage is not all that great for the resilience of the economy.) That doesn't even need any Hollywood accounting, it's very orthodox accounting. Yet, we keep pushing companies in that direction with the incentives that most tax systems around the world set.
- kory 5y agoGovernment should prove it can spend the money well before asking for more. The waste and incompetence I see in government is astounding. It's much worse than anything I've seen in private corporations. Speaking specifically for America, the government can barely even agree on where it wants to spend its current "budget". Say you have a couple who constantly fights over how to spend their $10m/yr budget, of which nearly half is borrowed, and 11% of which is spent on policing their entire neighborhood. Each year, they nearly default on their debt because they can't agree on a budget for the next year to keep paying interest. You wouldn't give them even more money to solve their problems, because the problems are clearly with the amount and poor allocation of their spending. Why would you do the same with the US government?
- oaiey 5y agoThis is not about asking for more money. This is about companies cannot fleeing rational tax rates of normal countries into countries which specialize in "stealing" the companies from normal countries and making this their code business.
- fcanela 5y agoWhy shouldn't people or companies be able to move where they can grow, prosper or have rules according to their values or projects? Curiously, when we talk about taxes the focus is often in the country that is harboring people instead the one that made itself unattractive.
- ric2b 5y agoWe're not talking about companies that _actually_ move to these countries, they just pretend to, on paper.
- oaiey 5y agoI think it does not matter where you put your company, you have to follow the rules of the market where you sell your goods. And these markets just said: you have to pay at least 15% tax to continue selling stuff here. Free trade is not a one direction story.
- cblconfederate 5y agothis will push most countries to compete towards 15%, and 'legitimizes' 12.5% corporate tax that other countries in the EU have. If it s no longer seen as punishable offense to move profits to malta, cyprus, bulgaria etc, lots more companies will do it.
- intricatedetail 5y agoIf corporation tax is essentially voluntary for big corporations, what difference does it make?
- kaminar 5y agoYou're correct about election suppression, by the left woke crowd...they get away with bullying voters in line, trying to force them to vote left...if you're trying to imply something else, you're wrong...again.
- yourapostasy 5y agoI'd like to see some domain experts chime in on whether CAIA neuters this headline, and whether Ireland will swan on down the road with multinationals continuing on as before.
- dang 5y agoPresumably related: 136 Countries agree to minimum corporate tax rate - https://news.ycombinator.com/item?id=28801599 https://news.ycombinator.com/item?id=28801599 - Oct 2021 (170 comments)
- anshumankmr 5y agoSerious question: what about Luxembourg, the Cayman Islands, the Bahamas and quite oddly, Pakistan???