7 ms·

Ireland to Phase Out Tax Advantage Used by Technology Firms

38 points by radley 12y ago

adaml_623 12y ago
I'm glad. This will encourage those slacker big firms to work harder to make money. They will stop spongeing off the education system and infrastructure paid for by the full tax paying companies and individuals. (N.B. I'm ironically copying the language used to describe people who are might or might not be working but still depend on government programs for food, housing, etc)
- SG- 12y ago
  I think it's more likely that we'll simply see more expensive products come out of these companies to make up for the lost money.
  - lotsofmangos 12y ago
    Yeah, perhaps Apple will get rid of their budget range or Google searches and Facebook profiles could double in price.
    - deleted 12y ago
      [deleted]
      - lotsofmangos 12y ago
        I forget sometimes that t'internet is no place for subtlety.
      - Pxtl 12y ago
        Whoosh!
  - pgeorgi 12y ago
    Which means that all costs (incl. expected profits) are priced in, instead of being partially subsidized through tax breaks (and thus paid by everyone, not just the consumers that use the products). That also levels the field a bit in that companies large enough to run departments that optimize for such loop holes have less of an advantage over the small fellows in the garage. Market at work, and all that.
- joshdance 12y ago
  Economists have something to say about the effects of taxes, and it usually isn't 'work harder to make money' - http://www.economics21.org/commentary/tax-increases-and-behavioral-responses http://www.economics21.org/commentary/tax-increases-and-beha... I have two friends from Ireland who work at a tech company who recently opened an office there. They love the work and say that it is easy for them and their friends to get jobs because of all the companies coming there. My company is thinking about opening a European office, and Ireland is under consideration. This move might slow or stop companies from coming to Ireland.
  - tomp 12y ago
    Noone is opposing tax breaks that countries give to companies incorporated in that country... as long as the tax breaks only apply to the country in question! However, if Google can pay lower tax on profits generated in the UK/France/rest of EU, by virtue of it being an Irish company, that's tax avoidance, plain and simple.
    - smokeyj 12y ago
      > that's tax avoidance, plain and simple. What's wrong with that?
      - Drakim 12y ago
        Everybody wants the benefits that tax money gives society, but nobody wants to pay for it. Companies don't exist in a vacuum, as evident in that very few companies prefer to put their offices in the middle of the sea or deep the jungle. They benefit greatly from infrastructure of our society, and it's fair that they should pay their share to build and maintain it.
        the_real_bto 12y ago
        You make a very fair argument. The real question is, how do we decide what is fair for each of us to pay? Companies playing legal games around taxes is exactly the behavior that the complicated tax code incentivizes. Play games, get money. Are corporations not supposed to play? It's parallel to programming productivity measurements. If a company starts counting LOC and rewarding it, they are going to get precisely what they asked for: More lines of code.
- Doctor_Fegg 12y ago
  I was going to upvote you until I saw it was an attempt at irony.
  - tomp 12y ago
    Fuck, I actually upvoted him/her. :(
- Nursie 12y ago
  Irony or not, a lot of people feel exactly this way about some corporate behaviour in our society.
ceph_ 12y ago
tl;dr: The loophole won't be phased out for companies that are already exploiting it till 2020
lettergram 12y ago
I don't really understand why this is an issue.. So the major countries in the EU are upset that companies don't want to operate out of a high tax zone, so they go to countries with lesser tax. Rather than lowering taxes, they "twist the arm" of countries who need the (all-be-it less) tax revenue the most. Seems to me that countries such as France, U.K., etc. are basically acting as robber barons.
- deleted 12y ago
  [deleted]
  - jk4930 12y ago
    The EU promotes fiscal and regulatory competition and mobility of people, companies, and capital since many years. But as soon as there's true competition, the bigger ones (with plenty of wasteful spending) don't work on themselves but bully the smaller competitors into compliance.
    - riffraff 12y ago
      except this is not asking ireland to raise their low tax rate, it's about closing a loophole that allows companies not to pay taxes in ireland either.
    - bhc 12y ago
      The reason EU cracked down on Ireland is because it offered special deals where Microsoft and other select multinationals got to pay lower corporate tax rate than other companies incorporated in Ireland. Ireland is being pressured by EU regulators because offering lower tax for only certain companies is a form of _state subsidy_ that results in _market distortion_. Ikea, the Swedish company that is a pioneer in now-common aggressive profit shifting practices, is not being pursued by EU since it doesn't have a special deal with the Netherlands (where Ikea has a paper company that gets all of its profit shovelled into) where it gets to pay lower corporate tax than other companies incorporated in the Netherlands.
- tomp 12y ago
chaostheory 12y ago
Would this affect the number of future offices in Ireland and negatively affect employment long term?
- steffan 12y ago
  Dublin does have a pool of talent from the existing companies based there, so any effects will be trailing; they won't show up immediately. My understanding is that a number of Europeans are not all that interested in relocating to Dublin. In the medium term, if the tax advantages are nullified, I think more international offices will end up opening in London or on the continent because it's easier to attract talent. I wouldn't be surprised if this ends up hurting tech development in Ireland in the long term.
  - patrickk 12y ago
    > I wouldn't be surprised if this ends up hurting tech development in Ireland in the long term. I'm not sure there is much tech development to hurt. "The talent pool here is much smaller than that of Silicon Valley. The single most important aspect of Silicon Valley is that it’s where many great people choose to live. Stripe’s employees come from Honduras, Kenya, India, Sweden, Canada, Austria, and more—but they’ve all chosen to live in Silicon Valley. Because Ireland has fewer of these immigrants, Irish start-ups are forced to either hire from a much more limited group, or to try to convince people to move here. (A third option is to have a geographically distributed team from the start; this route is also quite tough.)" source: (scroll down) http://patrickcollison.com/ http://patrickcollison.com/
    - davidw 12y ago
      Anywhere is going to come across as inferior to Silicon Valley from that point of view, but that doesn't mean there isn't some tech development there to hurt.
SG- 12y ago
How does the "double Irish" tax system compare to Asian countries that are basically starting to dominate the world again? How much tax does Samsung pay in South Korea as well as Chinese companies based in China?
- deleted 12y ago
  [deleted]
davidw 12y ago
Aren't these technology firms "above the law", though? https://news.ycombinator.com/item?id=8437030 https://news.ycombinator.com/item?id=8437030

38 points by radley 12y ago

I'm glad. This will encourage those slacker big firms to work harder to make money. They will stop spongeing off the education system and infrastructure paid for by the full tax paying companies and individuals. (N.B. I'm ironically copying the language used to describe people who are might or might not be working but still depend on government programs for food, housing, etc)

SG- 12y ago
I think it's more likely that we'll simply see more expensive products come out of these companies to make up for the lost money.
- lotsofmangos 12y ago
  Yeah, perhaps Apple will get rid of their budget range or Google searches and Facebook profiles could double in price.
  - deleted 12y ago
    [deleted]
    - lotsofmangos 12y ago
      I forget sometimes that t'internet is no place for subtlety.
    - Pxtl 12y ago
      Whoosh!
- pgeorgi 12y ago
  Which means that all costs (incl. expected profits) are priced in, instead of being partially subsidized through tax breaks (and thus paid by everyone, not just the consumers that use the products). That also levels the field a bit in that companies large enough to run departments that optimize for such loop holes have less of an advantage over the small fellows in the garage. Market at work, and all that.
joshdance 12y ago
Economists have something to say about the effects of taxes, and it usually isn't 'work harder to make money' - http://www.economics21.org/commentary/tax-increases-and-behavioral-responses http://www.economics21.org/commentary/tax-increases-and-beha... I have two friends from Ireland who work at a tech company who recently opened an office there. They love the work and say that it is easy for them and their friends to get jobs because of all the companies coming there. My company is thinking about opening a European office, and Ireland is under consideration. This move might slow or stop companies from coming to Ireland.
- tomp 12y ago
  Noone is opposing tax breaks that countries give to companies incorporated in that country... as long as the tax breaks only apply to the country in question! However, if Google can pay lower tax on profits generated in the UK/France/rest of EU, by virtue of it being an Irish company, that's tax avoidance, plain and simple.
  - smokeyj 12y ago
    > that's tax avoidance, plain and simple. What's wrong with that?
    - Drakim 12y ago
      Everybody wants the benefits that tax money gives society, but nobody wants to pay for it. Companies don't exist in a vacuum, as evident in that very few companies prefer to put their offices in the middle of the sea or deep the jungle. They benefit greatly from infrastructure of our society, and it's fair that they should pay their share to build and maintain it.
      - the_real_bto 12y ago
        You make a very fair argument. The real question is, how do we decide what is fair for each of us to pay? Companies playing legal games around taxes is exactly the behavior that the complicated tax code incentivizes. Play games, get money. Are corporations not supposed to play? It's parallel to programming productivity measurements. If a company starts counting LOC and rewarding it, they are going to get precisely what they asked for: More lines of code.
Doctor_Fegg 12y ago
I was going to upvote you until I saw it was an attempt at irony.
- tomp 12y ago
  Fuck, I actually upvoted him/her. :(
Nursie 12y ago
Irony or not, a lot of people feel exactly this way about some corporate behaviour in our society.

ceph_ 12y ago

tl;dr: The loophole won't be phased out for companies that are already exploiting it till 2020

lettergram 12y ago

I don't really understand why this is an issue.. So the major countries in the EU are upset that companies don't want to operate out of a high tax zone, so they go to countries with lesser tax. Rather than lowering taxes, they "twist the arm" of countries who need the (all-be-it less) tax revenue the most. Seems to me that countries such as France, U.K., etc. are basically acting as robber barons.

deleted 12y ago
[deleted]
- jk4930 12y ago
  The EU promotes fiscal and regulatory competition and mobility of people, companies, and capital since many years. But as soon as there's true competition, the bigger ones (with plenty of wasteful spending) don't work on themselves but bully the smaller competitors into compliance.
  - riffraff 12y ago
    except this is not asking ireland to raise their low tax rate, it's about closing a loophole that allows companies not to pay taxes in ireland either.
  - bhc 12y ago
    The reason EU cracked down on Ireland is because it offered special deals where Microsoft and other select multinationals got to pay lower corporate tax rate than other companies incorporated in Ireland. Ireland is being pressured by EU regulators because offering lower tax for only certain companies is a form of _state subsidy_ that results in _market distortion_. Ikea, the Swedish company that is a pioneer in now-common aggressive profit shifting practices, is not being pursued by EU since it doesn't have a special deal with the Netherlands (where Ikea has a paper company that gets all of its profit shovelled into) where it gets to pay lower corporate tax than other companies incorporated in the Netherlands.
tomp 12y ago

chaostheory 12y ago

Would this affect the number of future offices in Ireland and negatively affect employment long term?

steffan 12y ago
Dublin does have a pool of talent from the existing companies based there, so any effects will be trailing; they won't show up immediately. My understanding is that a number of Europeans are not all that interested in relocating to Dublin. In the medium term, if the tax advantages are nullified, I think more international offices will end up opening in London or on the continent because it's easier to attract talent. I wouldn't be surprised if this ends up hurting tech development in Ireland in the long term.
- patrickk 12y ago
  > I wouldn't be surprised if this ends up hurting tech development in Ireland in the long term. I'm not sure there is much tech development to hurt. "The talent pool here is much smaller than that of Silicon Valley. The single most important aspect of Silicon Valley is that it’s where many great people choose to live. Stripe’s employees come from Honduras, Kenya, India, Sweden, Canada, Austria, and more—but they’ve all chosen to live in Silicon Valley. Because Ireland has fewer of these immigrants, Irish start-ups are forced to either hire from a much more limited group, or to try to convince people to move here. (A third option is to have a geographically distributed team from the start; this route is also quite tough.)" source: (scroll down) http://patrickcollison.com/ http://patrickcollison.com/
  - davidw 12y ago
    Anywhere is going to come across as inferior to Silicon Valley from that point of view, but that doesn't mean there isn't some tech development there to hurt.

SG- 12y ago

How does the "double Irish" tax system compare to Asian countries that are basically starting to dominate the world again? How much tax does Samsung pay in South Korea as well as Chinese companies based in China?

deleted 12y ago
[deleted]

davidw 12y ago

Aren't these technology firms "above the law", though? https://news.ycombinator.com/item?id=8437030 https://news.ycombinator.com/item?id=8437030