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Other than risk of facing sanctions (lowe-case s), what is the incentive of say an Ireland to comply when their tax code is such an important reason why busines
by lefstathiou 12y ago
Other than risk of facing sanctions (lowe-case s), what is the incentive of say an Ireland to comply when their tax code is such an important reason why businesses go there? All else being equal, won't this hurt the development of many emerging markets (not just tax havens but even Asian countries where businesses have chosen not to re-patriot income - incentiving them to invest locally)
- Someone1234 12y agoThe concept is that even if Ireland continued to have a low tax rate, the country where the business is making their money could tax them when they try and send the money there. As the article puts it: If you're ONLY money moving to avoid tax, then it can be taxed. So if a company made tons in the US but then tried to ship it to Ireland, they would just get taxed by the US government at the normal rates instead of Ireland.
- ojbyrne 12y agoBut they don't just "ship" the money. They set up subsidiaries to provide services to the parent company. And then the services in low-tax jurisdictions just happen to have high margins. So now is government going to examine internal processes to ensure that margins are "fair?" Seems incredibly unworkable.
- ppereira 12y agoThey already do examine margins. Its called "transfer pricing". Information sharing is a key part of the proposals.