Should Ireland agree to the 15% Multinational Corporation Tax Rate?

[Brendan Burgess]

First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.

It would be good for the citizens of the World if that came to pass.

If so, then Ireland should not stand in the way of implementing that.

Imagine if you had different income tax rates in the different counties in Ireland. And Kerry brought in a maximum income tax rate of 10% as long as you owned a house there. We would all shift our income to Kerry.

Brendan

 

[jpd]

Of course we should - no point in sitting or standing in the face of a rising tide -ask Canute

 

[24601]

First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.

It would be good for the citizens of the World if that came to pass.

If so, then Ireland should not stand in the way of implementing that.

Imagine if you had different income tax rates in the different counties in Ireland. And Kerry brought in a maximum income tax rate of 10% as long as you owned a house there. We would all shift our income to Kerry.

Brendan

Why should it be 15% and not, say, 25%? Or 10% for that matter? Countries should be free to chose their own tax policy. If we want a 12.5% corporate tax rate for our own reasons then we should be free to set it at that level. Corporation tax policy has been transformative for the Irish economy. It's a tool that small states can leverage to their advantage and I don't think the likes of the US should be dictating to us what our tax policy should be.

In relation to the tax haven of Kerry, plenty of people already move their tax residence to lower tax jurisdictions - should there be a uniform personal income tax rate globally too?

 

[Steven Barrett]

First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.

It would be good for the citizens of the World if that came to pass.

If so, then Ireland should not stand in the way of implementing that.

Imagine if you had different income tax rates in the different counties in Ireland. And Kerry brought in a maximum income tax rate of 10% as long as you owned a house there. We would all shift our income to Kerry.

Brendan

Lots of people moving from California to Texas, where there is no state income tax. Elon Musk being one of them.

I do not agree that there should be a flat global corporation tax rate, as 24601 says, it allows smaller countries attract business where they would struggle otherwise. What I am against is large corporations paying nothing despite making billions in profit each year.

 

[NoRegretsCoyote]

60 years ago Ford made cars in America and had American shareholders. Citroen made cars in France and had French shareholders, etc, etc.

In that world it didn't really matter to Ford what the tax rate in France was, and vice versa.


But in today's world you have firms who make, design, and sell all over the world....with shareholders all over the world too.

The old "sovereign right to tax as we see fit" is very difficult to defend given that there is so much globalistion and so much scope to move profits to where they will be taxed the lowest.

 

[Itchy]

First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.

It would be good for the citizens of the World if that came to pass.

If so, then Ireland should not stand in the way of implementing that.

Hard to say that is what is being implemented, though. Its composed of various 'carve outs' and ultimately removes a competitive tool in the arsenal of smaller states without corresponding protections. Whats right and whats happening are two different things.

 

[joe sod]

The old "sovereign right to tax as we see fit" is very difficult to defend given that there is so much globalistion and so much scope to move profits to where they will be taxed the lowest.

Yes that has been true since the 90s with the break up of the Soviet union and the resulting globalisation but it looks like that era is ending. The US and EU are now on the same hymn sheet they want more taxes from those global multinationals. The global pandemic and the anti China rhetoric has actually increased since trump left. Globalisation is actually moving backwards now , when carbon taxes really kick in in the next few years this will have a big impact.

 

[Nermal]

First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.

It would be good for the citizens of the World if that came to pass.

If so, then Ireland should not stand in the way of implementing that.

Imagine if you had different income tax rates in the different counties in Ireland. And Kerry brought in a maximum income tax rate of 10% as long as you owned a house there. We would all shift our income to Kerry.

Brendan

There are no citizens of the world.

We already tax dividends and capital gains. How many bites of the cherry does the State need?

 

[Protocol]

First of all, from a global perspective, it seems right to say to the likes of Google and Amazon that they should pay at least 15% of their profits in Corporation Tax somewhere in the World.

It would be good for the citizens of the World if that came to pass.

Mostly, they pay more than 15% already.

 

[Protocol]

Here is data for 2020:

 

[Protocol]

Here is ten year's data.

Source for all tables is Seamus Coffey, UCC.

 

[Prosper]

We shouldn't agree to it until we know what the US Congress allows their government to do regarding corporate tax.

 

[MrEarl]

I don't think we should agree to increasing our Corporation Tax Rate - we're a small county that needs a competitive edge, and the 12.5% rate is it.

 

[letitroll]

The right strategy is to wait to see whether the US can follow through legislatively on its OECD commitments.............defending our rate now ensures that in a scenario where Biden fails to get Congress onside and effectively the 15% global minimum rate is dead on arrival.....Ireland can credibility communicate to investors that our rate, even in the face of global pressure, is a commitment we hold sacrosanct. The Netherlands & Luxemburg whom we compete with for particularly tax driven investments will not be able to say the same thing then. It's to Ireland advantage in this scenario.

If Congress approves the tax changes........Ireland will fall in line days later & nobody will remember or care we were with the St.Vincent & Grenadines for a while........we'll jack up the rate to 15 as why let tax leakage occur between our rate and the new soon to be implemented global minimum rate of 15%......the 2.5% spread may go some of the way to recouping the corporate tax lost due to BEPS Pillar 1 but alas wont be enough as Google/Facebook/Microsoft start sending big fat cheques to Macron & Merkel

 

[joe sod]

I don't think we should agree to increasing our Corporation Tax Rate - we're a small county that needs a competitive edge, and the 12.5% rate is it.

We are also one of the richest countries in Europe by income, we are no longer the poor 1980s economy. We can't really defend this on moral grounds, we can't really defend it period we will just have to accept what we are told to do by Joe Biden or Ursula.

 

[Purple]

I'd far rather see a discussion around minimum effective tax rates. The headline rate in France is 28% but the effective rate for top companies is under 10% and lower than Ireland. We have a very simple Corporation tax system where the effective rate is very close to the headline rate so a 15% rate here could be seriously disadvantageous.
Should big multinationals pay more tax? Yes, of course they should.
Should billionaires pay more tax? Yes, of course they should but that could only take the form of a wealth tax rather than an income tax.
We may be shooting at the wrong target.

 

[joe sod]

We may be shooting at the wrong target.

But Ireland doesn't get to decide what the target is, we have successfully dodged the bullet for more than a decade now. The government doesn't seem to be taking seriously that this is in the firing line, they are going to ramp up spending on housing and "green infrastructure" despite the glaring hole in the finances. Are we heading for another 2008 financial crash where spending becomes unsustainable when revenue suddenly falls. The bigger issue is that countries want to take tax from where the product is sold therefore France and Germany will be taking their share of the pie now

 

[Purple]

But Ireland doesn't get to decide what the target is, we have successfully dodged the bullet for more than a decade now.

No it doesn't and I didn't suggest otherwise but I certainly think we should be starting the conversation at an OECD level, if only to deflect the spotlight away from us.

The government doesn't seem to be taking seriously that this is in the firing line, they are going to ramp up spending on housing and "green infrastructure" despite the glaring hole in the finances. Are we heading for another 2008 financial crash where spending becomes unsustainable when revenue suddenly falls.

Possibly, maybe probably. Fear of the populist left is driving the government to do stupid things and an economically illiterate populace is being fed emotive populist nonsense by a heavily unionised left wing media. The rubbish about the causes of the housing crisis being the best case in point.

The bigger issue is that countries want to take tax from where the product is sold therefore France and Germany will be taking their share of the pie now

Yes, but that's what we said we want and our defence in the EU/Ireland Apple tax case.

 

[blackdog]

The State is a service provider, like every other company. What would happen if the world's mobile phone providers came together and agreed a global minimum monthly charge of 150 euro?

Personal income over 35k is taxed at 48.5 per cent. That's obscene - there is no incentive for a person to work hard, no attempt to help individuals struggling with the rising cost of living and housing. Will they do anything about this as a result of this Corp Tax change? No... It will simply go towards pet projects, like the "covering your rear end" ultra risk averse approach to Covid over the past 18 months. We need to know where this money is going...

 

[MrEarl]

We are also one of the richest countries in Europe by income, we are no longer the poor 1980s economy. We can't really defend this on moral grounds, we can't really defend it period we will just have to accept what we are told to do by Joe Biden or Ursula.

We need to think about the future, not just the present, and the past.

We are a country with very limited natural resources, we cannot compete on price given higher overheards (ultimately due to the cost of living), and incur higher costs to inport / export goods and services, due to being an island.

Ireland has a veto, when it comes to the EU agreeing to things like tax harmonisation, and we should use it, even if it does upset a few of our bigger European partners. It won't be a surprise to them, anyway, given we will just be maintaining our clear long term position on Corporation Tax.