Is the jig up for our economic one trick "low" corp tax pony? ( Future UK, US =<15% )

robut

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So - y'all have heard by now that Trump intends to drop the US Corporation tax to about 15% with an even lower 10% to companies who come home.

Add this now, as of TODAY 21/11/2016 - PM promises businesses tax cut but cools on workers on boards plan

The PM has promised to cut business tax to the lowest level in the G20 but has come under fire for watering down plans to put workers on company boards.

In a bold pledge in her first speech to a CBI conference, Theresa May suggested the Government could cut corporation tax below the 15% promised by Donald Trump during his campaign.
EDIT: Thanks to Oscurito:

http://www.rte.ie/news/business/2016/1117/832489-hungary-to-cut-corporate-tax-rate-to-lowest-in-eu/

Hungarian stocks have reversed an early fall today as the government pledged a corporation tax cut, which would give the country the lowest rate in the European Union.

Hungarian officials said the corporate tax rate would be lowered to a flat 9% next year at a cost of 145 billion forints (€470.2 million).
With respect to our Corporation Tax as the main leg of our economic plan, I have been hearing IBEC and other biz bods saying Nothing to see here folks, doesnt matter. We are more than out corporation Tax rate. FDI comes here primarily for our highly educated workforce and as a base to access Europe .. so no worries from these guys. Is this the usual green jersey crap OR is there any truth to this?

So is the jig up? OR is all this really a non-story, nothing to worry about?
 
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wombat

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This has been discussed on multiple threads. Its important but its not the only reason companies locate here, not sure another thread will add anything.
 

robut

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This has been discussed on multiple threads. Its important but its not the only reason companies locate here, not sure another thread will add anything.
Yip - I added this here because of MAYS talk to the CBI TODAY so sharper focus on this now I think.

So Wombat you would be in the This is a non story, nothing to see here folks camp?? ZOO this RIGHT AWAY? .. Sorry for forcing you to look at this :D

BTW up to now the UK were looking at dropping to 17%. This is a whole new departure. At or below 15% for both US and UK, making any difference between our rate and these new rates not worth considering from FDI terms?
 
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mossyman

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I don't see any major pullout of multinationals but I think we will see the number in employed in foreign owned companies gradually decline over the next 5 - 10 years as it will be much harder to attract new investment and replace jobs that will inevitably be lost. My reason for thinking this is the MNCs created no net new jobs in Ireland between 2000-2014. Now with Brexit and Trump and whatever else is coming down the tracks the competition has just got much more difficult.

Ireland: Jobs in foreign-owned exporting sector in 2014 below 2000 level
 

gerhard dengler

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Other jurisdictions lowering their rate of corporation tax, will test the assumptions made by this jurisdiction that foreign companies come to Ireland because

(a) we've the brightest workforce in the whole wide world
(b) we speak English.
 

Betson

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It seems a bit of desperate ploy by May to reassure Business's in the UK , especially given all the disapproving nods in the UK and the rest of European big wigs were giving us because of our low corporate tax rates.

Cannot see it been much of a help in their EU negotiations as it would be financial suicide for other EU countries to allow someone like the UK complete access to the common market if they had a such a low corporate tax rate. Would certainly be a threat to us and other EU countries.

Also a big risk from for a big economy like the UK and indeed America to speculate that much lower corporate tax will result in a greater take overall , it could very easily go the other way with serious consequences for them.

Much less risky for us to do it at the time in a small economy that was not really getting a lot of return from existing corporate returns anyway.
 

robut

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Should Enda stop challenging the APPLE ruling now and just take the money and run IF the jig is up soon??
 

PBP voter

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Bankers and Big Business are going to force every country to a rate below 10%.

It doesn't make much difference in Europe as most big companies pay 0% anyway.
 

Accidental sock

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I didn't base my multinational here because of the low corporation tax.

Sure, it's nice but I'm mostly here for Clonakilty pudding and red lemonade.
 

wombat

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Much less risky for us to do it at the time in a small economy that was not really getting a lot of return from existing corporate returns anyway.
We have a few sectors which are very profitable mainly IT & pharma but these sectors are less important in large countries like the US or UK which have big established industrial sectors. Cutting corporate taxes on these sectors will be quite unpopular when services are being cut.
 

mossyman

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Bankers and Big Business are going to force every country to a rate below 10%.

It doesn't make much difference in Europe as most big companies pay 0% anyway.
The problem is that under EU rules all corporations have to pay the same rate of tax in each country. SMEs in Ireland pay the 12.5 percent rate. I'm not a tax expert but I believe even a small solicitors firms can incorporate and pay the 12.5%. It means low tax for business across the board.
 

Franzoni

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Should Enda stop challenging the APPLE ruling now and just take the money and run IF the jig is up soon??
Fuks sake Robut...haven't you copped by now that own shower of gobshítes only pull strokes on us because like a bigger shower of gobshítes we let them ...!..:D

Look at all fukkin eejits going to vote for FF after all the crap they have pulled in the last 40 years or will vote for FG and allowed themselves to be dipped with cost of living increases on rents,insurance and other day to day stuff and indirect taxes brought on by privatization and selling as much of the family silver as they can to international vulture funds...
 

cabledude

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I work for a large multinational. There are a variety of reasons they chose to locate here. These reasons do not include tax - they were here before the tax rates were as low as they are now. Not all multinationals are yank owned......
 

mossyman

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I work for a large multinational. There are a variety of reasons they chose to locate here. These reasons do not include tax - they were here before the tax rates were as low as they are now. Not all multinationals are yank owned......
Then why does the IDA say our low corporate rate is essential and must be defended to the hilt? Do they not know what they are talking about?
 

Paddy Sarkozy

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I work for a large multinational. There are a variety of reasons they chose to locate here. These reasons do not include tax - they were here before the tax rates were as low as they are now. Not all multinationals are yank owned......
If it's not yanks it'll be scandinavians and they don't care about tax, they're only here for one thing - our wimmins!
 

Watcher2

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Yip - I added this here because of MAYS talk to the CBI TODAY so sharper focus on this now I think.

So Wombat you would be in the This is a non story, nothing to see here folks camp?? ZOO this RIGHT AWAY? .. Sorry for forcing you to look at this :D

BTW up to now the UK were looking at dropping to 17%. This is a whole new departure. At or below 15% for both US and UK, making any difference between our rate and these new rates not worth considering from FDI terms?
IF the Britain exits the EU, this should not be a major thing for us. If they remain however, this could be a big blow for us. Major MNC executives are more likely to move to London than to Dublin (or any other Irish city). I'm not sure the Brits will reduce their corpo taxes that much. Wont it need to be passed by Parliament? Not sure they will be so gung ho in forgoing so much tax revenue.
 

Spanner Island

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So - y'all have heard by now that Trump intends to drop the US Corporation tax to about 15% with an even lower 10% to companies who come home.

Add this now, as of TODAY 21/11/2016 - PM promises businesses tax cut but cools on workers on boards plan



With respect to our Corporation Tax as the main leg of our economic plan, I have been hearing IBEC and other biz bods saying Nothing to see here folks, doesnt matter. We are more than out corporation Tax rate. FDI comes here primarily for our highly educated workforce and as a base to access Europe .. so no worries from these guys. Is this the usual green jersy crap OR is there any truth to this?

So is the jig up? OR is all this really a non-story, nothing to worry about?
I think it is...

It won't happen overnight but I doubt we'll be seeing any major announcements anymore... not from US MNCs at least. There is probably some opportunity looking east... towards China and India for companies that want an EU base... but the US MNCs that are here will probably stall the ball now and see what Trump does in his first year...

Because that's when he's going to do what he says he'll do... and cutting Corp tax will be one of the easier things for the GOP to go with...

Our lot seem to think it'll be slow enough and that we'll have plenty of time to adapt... whereas this may not be the case at all. Our lot are used to the sclerotic pace of things in political bureaucrat land... whereas Trump was elected in part to kick all that up the arse...

If this is the case then in not too long a time we may well see multiple closures or significant downsizing by US MNCs... and our lot better have a plan other than the usual 'let's wait and see'...

The UK is in more of a straight jacket than the US. They haven't even triggered A50 after which it will take them at least 2 years to extricate themselves from the EU... during which time they can't engage in any trade deals...

Only after they've left will they be able to do that... which probably means WTO rules for them and probably means the UK is a bit f***ed in the short/medium term with a ballooning deficit etc... which of course won't be good for Ireland... but the whole Brexit thing is a much messier situation than the US...

We'll see if major MNCs are here for things other than our tax regime soon enough.
 


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