And then we add the calls to set a minimum corporate tax rate to the mix and realize that the EU does this because Germany and France don't want businesses to go to Ireland instead of them.
The EU can't work together on this, because their motives are incompatible. France, Germany want the corporations to pay taxes in France and Germany for the business they do in those countries. Ireland's business is offering a tax cut to the corporations so the corporations don't pay taxes in France or Germany and Ireland get's a cut in return. Ireland has no interest in changing this, obviously.
This is one of the reasons EU is never gonna fly. Countries like Ireland are allowed to offer lower corporate taxation but still benefiting of the EU common market. No wonder why most companies have/move their tax domicile in these countries (like Nederland). This is unfair competition and EU should stop this s*t show. Businesses should be taxed based on where the revenue is generated and not where their tax domicile is placed.
The EU "government" (a non-directly elected entity) is predictably trying to enforce tax rules.
Even worse is the minimum tax on profits that targets the poorer members by removing one of the ways they can compete with bigger ones.
"...No Ireland, you're not allowed to have low taxes, we the guideposts of EU - France and Germany tax our people and companies up to 30-45%, what's that meager 10% tax you're giving them? ..."
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.
This isn't only ongoing, this is by design, and being actively pushed further, because in the EU if you are by definition an equal opportunity tax haven like Luxemburg you are golden.
Luxembourg is like the delaware of Europe, it's a banking and financial institution state and both its own laws and the EU laws and policies it lobbies (and when you effectively are not only Delaware but also the DC of the EU it kinda helps) for ensure that it would continue to operate as one.
The bad thing that Ireland and is a big no-no in the EU is to go to the likes of apple and say:
Hai Apple I really want you inside of me!
I know I'm small, and I don't have a huge workforce and internal market, I'm not like Germany.
I also don't have a huge economic and financial infrastructure like Luxembourg, Switzerland or UK (London) but I'm a really hard worker!
Tell me what skills you need, and I'll educate my people, I'll give you low interest loans to build your shiny offices and I will give you tax deduction if you employ my peeps.
I would do all that I can to make sure it will be easy for you to operate here because I really don't have much to offer and I need to compete with the bigger countries since the euro is expensive and the price stability is managed by the ECB and my people need to eat and loans I've been taking on are becoming harder and harder to pay.
Now this is the only way that Ireland can really attract large corporations and make it more lucrative to invest in its industry, this is what effectively every country on the planet does when it wants to grow.
And since Ireland can't control it's own monetary policy and currency it also can't just be a cheap place to be, while there is some local variation because of the mandate of the ECB to control the price stability within the Eurozone the prices of many goods and services are quite similar (Ireland is actually more expensive than Germany because it's an island which increases the costs of logistics and it has lower production which means more imports which add costs even if they import within the EU) it needs boost its economy in order to match the salary level of the other Eurozone states and to do it it needs to offer something to corporations.
It can't offer them a huge workforce because it doesn't have one, It can't offer them access to financial and banking infrastructure because it doesn't have that either, what it can offer is English, fund both academic and vocational education and training based on the skills those companies need and give them tax incentives to come and employ Irish people.
Ireland isn't Luxembourg Apple didn't set up effectively a "shell" there that's pretty much there for easy tax loopholes and actually employes no one, Apple employees directly over 6000 people in Ireland and indirectly 4-5K more, same goes for Microsoft, Google, Facebook, Amazon and the likes.
This isn't some tax break Island that those companies incorporate in by name only and don't actually have staff, companies have "real" employees in Ireland because the Irish "incentives" are tied to direct employment.
Ireland isn't trying to create tax loopholes to make a quick buck to split it between a few 100's residents, it tries to keep it's 5M people employed, forcing them to play by the "same rules" as 4 of the world's 10 largest economies is asinine.
Not very surprising.
Ireland's entire economy is being based on being a cheap low tax mailbox provider for US Multinationals, trying to bend laws as much as possible in their favor just fits in there
That's why there is a big push on minimum tax rates in the European Union, nobody wants that race to the bottom
1) win and things continue as they are
2) lose, and leave the EU
3) lose, and Apple and 1000s of other companies leave Ireland and Ireland loses in the Long run.
If the EU wants taxes to be paid they need to fix local tax laws not chase businesses to pay. Fix why companies offshore this stuff to begin with. Taxes are too high.
Btw. Ireland is one of the best examples why the EU doesn't work.
A lot of the good parts of Ireland happened, caused by the low cut tax rates. Even german companies used some tricks until 2014/2015 to get money out of the EU by using some 'double Irish arrangement' or other stuff. Ireland is actually one of the best countries for businesses inside the EU and it can't be good that one country is better than any other country inside the EU. In a group of countries with the same exchange it should be forbidden to have different tax rates and some other specials for companies.
Also I doubt that 90% of the stuff you said would be possible just without the EU. I also thing that actually most things would actually be easier.
Actually there is way more controversial stuff inside the EU that I know of and that is publicly available.
Also I live in germany and we profited the most from the things happened inside the EU, that's actually controversial as well.
3) Part of the Euro zone (less important than #1 and #2 to be sure).
Given the OECD tax agreement there are fewer low-tax destinations for companies to pick from. And because of Brexit there are no other English-speaking EU countries.
Companies in Ireland aren’t going anywhere and it remains a pretty good option for any new HQs looking to expand into Europe. Ireland is just making more money off of each of them.
Ireland is basically selling multinational corporations the right to avoid paying their taxes to other European countries in which they have significant activity.
It's an absurd situation where the European Union is basically trying to force the Irish government to raise and actually collect taxes on corporations, but Dublin is pushing back, and in the end you have those same corporations offering to do the government's job.
It is a common rule in EU however that you can not favor one company over another. This is what is the issue here, not the specific tax rate. The EU isn't saying what tax rate Ireland may tax at simply that they have to treat every company the same.
How do you think the single market would work if say Irish owned companies paid half the tax of spanish owned companies in Ireland?
> It's not that Ireland does not want to import corporate tax from France and Italy, it is that they substantially lowered it, expressly to take advantage of the other EU countries.
Good. That's called competition. They want to attract companies to their country. There are plenty of things Ireland can't compete on, like having a decent climate (IMO), so they do what they can.
> You can also see that I didn't advocate higher taxes for Ireland or lower taxes for the rest of EU, since it doesn't actually matter as long as they are the same in all EU.
Then why doesn't France lower theirs? "Harmonization" is just a way of saying "they should raise their taxes".
The problem is the EU's process which requires all countries to vote unanimous on this. Ireland is vetoing any change to keep being allowed to set their own tax rates and underbid anybody else while still keeping access to the EU market. In that regard The Netherlands aren't any better by the way.
The EU allows a couple of its countries to act as tax havens. Ireland and the Netherlands are probably pretty pleased that EU citizens seem to direct all their outrage at the companies that do the obvious thing instead of at their tax laws.
Seems like the central EU government has grown stronger against the autonomy of member states as they have been challenging Republic of Ireland's role in this for some time? And/Or the US tax regime is favorable enough now? Which is nice that you can wait it out. Easier to offset a 20% US corporate tax than a 35% one.
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