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Hostility to US multinationals' tax avoidance in UK,France and Italy will drive investment to Ireland and maybe solve all our economic problems


patslatt

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Hostility to US multinationals' tax avoidance in UK,France and Italy will drive investment to Ireland and maybe solve all our economic problems

The UK mentality of "It's not fair" is pressuring Starbucks,Google and Facebook to pay more UK corporate tax. The French under idiot President Hollande have begun tax investigations of multinationals, with arbitrary,potentially huge penalties on those companies. The Italians are treating normal technical tax compliance disputes as criminal matters,given the loose cannon laws available to prosecutors for crushing Mafia activities,not to mention politically motivated attacks on lecherous Berlusconi. This tax crusade pleases the publics in all three countries as shown in boycotts of UK Starbucks.But the UK government will likely ease up on multinationals soon on which it depends for huge foreign direct investment,FDI.

The reality is that EU countries won't surrender enough sovereignty over taxes to make multinationals pay a reasonably high tax rate. This allows countries like Ireland and Eastern European countries with very low tax rates to attract disproportionately large FDI. After recent stunts by tax authorities in France and Italy,tax planners will be advising multinationals to switch a lot more FDI to Ireland which is considered an extremely stable FDI tax jurisdiction.Ever since the 1950s depression that wrecked the economy and caused mass emigration,the Irish shrewdly realised that multinational tax breaks attract huge amounts of job creating foreign investment. Despite all the political changes in the 50 years since then,that attitude hasn't changed,even among many left wing politicians.
 


TheWexfordInn

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.. to Ireland which is considered an extremely stable FDI tax jurisdiction.
With Ireland now beholding to foreign powers for its economic survival I wouldn't count on this stability remaining in light of the ever more vocal objections against the current tax regime coming from those foreign powers holding the purse strings.
 

toconn

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The fact is the UK,Italy and France have much larger populations and the retail businesses in particular need to keep these consumers onside , therefore they will give in to extra tax payments and look to make up the profit shortfall elsewhere. Personally I think it's great that in the UK the campaign to purchase at companies who pay full Corp tax is having an effect, puts the Tory politicians in an awkward spot too.
 

livingstone

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Surely the fact that starbucks made a voluntary payment demonstrates that they need the UK market and will do what's necessary to keep it.

The problem is that this isn't just about where companies locate their HQs, it's about where they operate - and no retail company is going to foresake the revenue of the UK be it in coffee sales, book sales or advertising sales.
 

Clanrickard

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A view from England

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What the UK is asking for is for these companies to pay a fair rate of tax on the profits made in the UK and not undertake to avoid these taxes by availing of fiddles such as the Double Irish. These companies are not going to stop trading in the UK because the profits they make are huge. As far as Ireland is concerned it should be looking over it's shoulder because it may be the case soon that tax fiddle schemes such as the Double Irish are outlawed in the EU and instead of FDI flocking to Ireland it may go the other way. The UK, Germans and French are all into this.
 

making waves

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If I was thick enough to be a socialist I would hold my whist.
If I was stupid enough to cheerlead for patslatt I would bury my head in the sand so that no one would notice how stupid I was.

Here - specially for you and pat -

[video=youtube;S6ZsXrzF8Cc]http://www.youtube.com/watch?v=S6ZsXrzF8Cc[/video]
 

Ulster-Lad

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What the UK is asking for is for these companies to pay a fair rate of tax on the profits made in the UK and not undertake to avoid these taxes by availing of fiddles such as the Double Irish. These companies are not going to stop trading in the UK because the profits they make are huge. As far as Ireland is concerned it should be looking over it's shoulder because it may be the case soon that tax fiddle schemes such as the Double Irish are outlawed in the EU and instead of FDI flocking to Ireland it may go the other way. The UK, Germans and French are all into this.
GOOGLE Ireland paid a puny 0.14 per cent tax on sales of over €47bn in seven years, the Sunday Independent has found.

"Ireland has the laxest transfer pricing rules of anywhere in Europe because of the objective of employment there," said Richard Murphy of Tax Research UK. "So it can't turn around and say 'you're not paying enough tax.'
Google pays just 0.14% tax in seven years - Irish, Business - Independent.ie

Good article on it here.
 

Ulster-Lad

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I presume thats the effective rate, so we are getting .14% on Sales that do not happen here.
A far cry indeed from the 12.5% they are supposed to be paying. But they do not and as the article states the government have no interest in going after them.

"Ireland doesn't ask questions of companies that are located there," he said. "Politicians of all parties in Ireland have nailed their colours to the low tax-rate mast, so Ireland is unable to take to task large corporations that are taking it for a ride. It can't then turn around and say 'now we're going to give you a tough time in audit'."
 

Edo

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and people wonder why we have such an uphill struggle to restore our reputation in Europe!

Lets face it - we have become the tax-dodging facilitators of Europe and further afield - the biggest tax-evader on the list that the Greek Gov has - has been traced to an investment fund in Ireland...........

and you wonder why the likes of Germany and the rest are so insistent that we pay our bankers debts? - our state, thru popularly elected democratic governments over 25 year put in place a system of lax regulation and tax avoidance facilitation to attract finance and banks from all over Europe to set in Ireland to gamble and speculate and avoid tax - it was the speculation of a lot of banks under the supervision of our central bank that had a lot to do with the economic crisis we are now in - fully aided by popular governments elected by the Irish people..............

count yourselves lucky that the full bill for all the banks operating in Ireland wasn't landed on us - that would have been over 2.5 trillion euros and counting - our regulatory authorities facilitated the reckless gambling to the last..........stuff they would not have gotten away with even in Switzerland.......

the world is changing..........over the last 2 years I can see signs and movement right across the world that the days of making money in one state and paying tax on it somewhere else are ending................there is going to be a mulit-national agreement on this as all states - bar the parasites like ourselves - are in full agreement that something is going to be done on this.........after the staggering cost to sovereigns right across the world - change is coming......

In the EU - the first sign of this is the CCCTB - its the first step to getting Multi-nationals back under control - if you do business in a country - you pay tax on that business in that country..............even to a free marketer like myself - it sounds totally fair........

we have go to start dismantling the current "low tax - low regulation" model as soon as possible - its going and its vital we dont go with it - it served its purpose and its time for us to move on..............
 

bob3367

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A far cry indeed from the 12.5% they are supposed to be paying. But they do not and as the article states the government have no interest in going after them.
No company pays CT on sales, your argument is full of holes and ignorance.
 

Clanrickard

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and people wonder why we have such an uphill struggle to restore our reputation in Europe!

Lets face it - we have become the tax-dodging facilitators of Europe and further afield - the biggest tax-evader on the list that the Greek Gov has - has been traced to an investment fund in Ireland...........
.
Absolute rubbish. We have low taxes on corporate profits. So do many countries. Most of the animosity towards us is pure and simple envy. Estonia has zero CT so why aren't Google, Microsoft and Intel all in Tallinn?
 

Clanrickard

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So maybe you could explain the full Irish with a Dutch twist to us there bob??
Has nothing to do with sales and has to do with the almost zero tax the Dutch charge on intellectual property. IKEA is headquartered in Holland and pays almost no tax. U2 moved their music publishing arm there for the same reason. Yet we never here Holland singled out for criticism of its taxes.
 

bob3367

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So maybe you could explain the full Irish with a Dutch twist to us there bob??
The simple fact is that Google accounts for its European Sales in Ireland, CT is paid on profits not sales, thats the point.

We are getting tax Revenue for non Irish Sales.
 

A view from England

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Absolute rubbish. We have low taxes on corporate profits. So do many countries. Most of the animosity towards us is pure and simple envy. Estonia has zero CT so why aren't Google, Microsoft and Intel all in Tallinn?
Ireland allows the profits of companies gained in other countries to be funnelled through "head offices" in Dublin etc to facilitate tax avoidance. I couldn't give a toss whether Ireland has 1% or 100% CT, what people are starting to get pee'd off about is Ireland and the like facilitating mass tax avoidance and ensuring that the likes of Germany, France and the UK are missing out on taxes that should be paid on the profits in those countries. The EU has woken up to this and hopefully loopholes such as the Double Irish will soo be closed. This will make no difference to the CT rates, but will prevent Ireland facilitating tax avoidance.
 

Edo

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Absolute rubbish. We have low taxes on corporate profits. So do many countries. Most of the animosity towards us is pure and simple envy. Estonia has zero CT so why aren't Google, Microsoft and Intel all in Tallinn?
the animosity towards us is down to the fact that we have low tax and very lax regulation - while at the same time - running 15 billion budget deficits per annum which are being being funded by taxpayers elsewhere - most of them from those very states where the likes of google do very healthy business - yet pay little or no taxes on that business.

Yeah Estonia has zero CT - it also isnt running a tab with the rest of the EU to fund its day to day living - in fact they did exactly what we should have done in the first place when they got into trouble at the same time - ie slashed the cost of their state to match the revenues coming in, got in the IMF from the get-go and paid off their debts..........

there are many factors around companies deciding to set up in different places - corporate taxation being only one of them - lax regulation and the allowance of price and sales transference being another............we had a massive headstart on the likes of Estonia in regard to attracting US multi-nationals - and if we are so good - then they wont mind staying here and paying corporation tax here - yet paying taxes on their business in other countries in those countries.

Im sure that other countries are mildy envious of us attracting the likes of Google, intel etc etc - we have an educated workforce,english speaking,a friendly business environment and lots of other incentives - faciliating tax avoidance should not be one of them
 
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