G7 agree minimum 15% corporation tax

odyssey06

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Impact on Ireland unclear to me from this article... are we likely to see a drop in our corporation tax revenue?
Or will things balance out as we arent taxing some of this revenue?

Under the scheme the companies will be forced to pay taxes in the countries they operate in and not just where they have their headquarters.
The rules would apply to global firms with at least a 10% profit margin – and would see 20% of any profit above the 10% margin reallocated and then subjected to tax in the countries they operate.

 

bunny_

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I can see them all running operations in the Caribbean where there are no accounting and just paying the minimum tax - or am I wrong?

Irish Revenue is about 50 Billion, so 2 to 2.5 Billion is only a 4 to 5 percent loss... maybe a slight tax increase at the top rate would cover it, I don't know for sure...
 

kinnjohn

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I would say the penny has dropped with Paschal, He now knows why they made him President of the Eurogroup,
I wonder will there be High paid Jobs losses in tax planning and the cottage industries that sprang up around our low Corporation tax,
The 2 to 2.5 Billion is corporation tax loss, Hope the losses stop at that,
Just as well FG and FF are in power at present I think both spent Corporation Tax on outgoings that cannot be cutback without a big uproar,

Tax increases are going to cause a big uproar as well the sad thing is they can only hit their own support base for extra tax, not a nice position to find themselves in by all accounts,
They can either take back some of the corporation tax from the people they gave it to or tax their own support base more, I think the easiest way out is to tax their own support base they have nowhere else to go,
 
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odyssey06

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Yeah media now reporting the figure

Donohoe has said Ireland could lose up to one fifth of its corporate tax revenue each year – some €2.2 billion – if the 15% rate agreed today at the G7 meeting is put in place.
 

moneymakeover

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The concern for Ireland is more the potential loss of foreign direct investment.

Previously Ireland didn't care about the loss of 12 billion tax bill for Apple

The real concern is job losses

Paschal will fight it citing Ireland needs such measures to level the playing field for small peripheral counrties.
 

kinnjohn

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The concern for Ireland is more the potential loss of foreign direct investment.

Previously Ireland didn't care about the loss of 12 billion tax bill for Apple

The real concern is job losses

Paschal will fight it citing Ireland needs such measures to level the playing field for small peripheral counrties.
The problem is explaining how the large increases in corporation taxes got spent in the last few years on his watch,
When they see the wage income levels in some of the small peripheral countries I don't think they will listen to paschal for long,
I hope I am wrong but I think We spent the corporation tax on the wrong things in the last four or five years,
We knew this was coming and we spent like it was not going to happen,
 
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bunny_

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@Protocol - You can't include PRSI as that's pensions & welfare... About €62 Billion excluding PRSI - but I think several billion are going on debt repayments so the spend is less than €60 Billion... I can't find it now but the figure came from RTE News - I'm willing to be corrected though
 

joe sod

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The real concern is job losses

Paschal will fight it citing Ireland needs such measures to level the playing field for small peripheral counrties.
During the whole pandemic when money was being thrown round like snuff at a wake , taxation and how this was going to be paid for wasn't mentioned once, in fact the media studiously avoided the topic. Now with the economy about to open up suddenly all this talk about taxation, the ESRI has awoken from its slumber.
Paschal and Leo et al know whats coming down the road, my bet is that they both will leave for jobs in Europe. The lack of urgency in realing in the PUP , the commitments given to the green party on carbon taxes etc etc means that no responsible government will want to take charge, heck even Sinn Fein must be scared at the prospects of taking over, populism is about to meet cold hard reality
 

bunny_

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Yes you can, and should.

It's basically a tax like any other.
It is a tax, but it gets spent almost immediately... take 2015 from Table 1 from Protocol's link above, Total Revenue is 71.931 Billion, of which 50.750 Billion in Taxes and 12.324 Billion in Social Contributions --- then go down to Expenditures and Social Benefits where we spent 28.689 Billion --- so it gets spend even quicker on welfare than we bring in PRSI payments, the additional spend comes from general taxation....

Include PRSI or not, personal preference, it's still less than 5% which isn't a huge deal, more people in the top rate tax bracket will probably pay for any loss in revenue from less Corporate taxation... add another 1% to the top rate tax and it'll close the gap even more... I would like less tax by the way but we have some of the lowest tax to GDP in Europe so we can't complain too much either... Google: tax revenue to gdp ratio
 

bunny_

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So everything gets lobbed in to the same pot, and PRSI pays for roads and road tax pays for social security and if you're short you borrow the rest through government bonds... is that correct?
 

Protocol

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We are off-topic here.

PRSI goes into the SIF, yes.

The SIF is used to finance Social Insurance benefits (not Social Assistance).

If the PRSI receipts aren't enough, the Exchequer uses taxes to top up the SIF.

So in a sense PRSI is kept separate from tax.
 

Protocol

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We are off-topic, we are meant to be discussing the impact of possible new worldwide CT rules
 
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