Ireland to Phase Out Tax Break Used by Technology Firms

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Now that Ireland has decided to close the "Double Irish" tax loop hole, we can no doubt expect the majority of US tech companies to flee the country before the deadline hits.

Aggressive tax planning by the multinational companies has been criticized by governments across the globe and has damaged the reputation of many countries,” Michael Noonan, Ireland’s finance minister, told the Irish Parliament on Tuesday. “I am abolishing the ability of companies to use the ‘double Irish’ by changing our residency rules to require all companies registered in Ireland to also be tax resident,” he added in a budget speech.
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Interesting as Dublin is getting a massive influx of tech companies, Intel just invested $5billion in Dublin to turn the place into a "tech town" and Google, Facebook and other large companies are opening offices there if not already.
 
MrGuvernment said:
Interesting as Dublin is getting a massive influx of tech companies, Intel just invested $5billion in Dublin to turn the place into a "tech town" and Google, Facebook and other large companies are opening offices there if not already.
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Intel has had a presence in Ireland for decades ... there are many other advantages to being in Ireland (as your gateway to the EU), even without the tax benefit ... the few companies that moved there exclusively for the taxes can just move to a country like Mauritius (the country my former employer used) ... you don't even need a physical presence there (you just exist on paper and all your transactions route through there) :cool:
 
But, they are all grandfathered in until 2020. In the end, money talks and money will prevail. Fear not.
 
I see this whole tax thing as a downside for US. I know its pressure from US and others, but this pressure could backfire and push the industries to move completely to a lower taxed country. This would in turn backfire as the US who wasn't getting much would be getting even less if these tech companies move. The other side of that as well is if these giants leave it will leave a huge hole in economy and even potential job changes.
 
Easiest fix on this is to tax companies based on their revenue, and NOT their profits, then shifting money around and calling it "business expenses" becomes a non-issue. Kind of like how individual income tax works, I can have all the "expenses" in the world I'm still taxed based upon the money that I take in, not how much of it I actually have left over after paying off everything. (although I realize that quite a few things can be used as "deductions" like having kids, having a loan on a house, etc.)
 
sfsuphysics said:
Easiest fix on this is to tax companies based on their revenue, and NOT their profits, then shifting money around and calling it "business expenses" becomes a non-issue. Kind of like how individual income tax works, I can have all the "expenses" in the world I'm still taxed based upon the money that I take in, not how much of it I actually have left over after paying off everything. (although I realize that quite a few things can be used as "deductions" like having kids, having a loan on a house, etc.)
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You don't think this would be a problem for high volume, low margin businesses?
 
maverikv said:
You don't think this would be a problem for high volume, low margin businesses?
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They're trying to pass that law here in Las Vegas. Small businesses could be hurt by it, as they sometimes don't turn a profit for a few years.

The issue isn't so much how they're taxed, it's the convoluted tax law.
 
maverikv said:
You don't think this would be a problem for high volume, low margin businesses?
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Of course it could be a problem. But I didn't state it would be problem free, I was just saying if we tax businesses like we tax individuals (after all SCOTUS says they are people right?? :D) these tax dodging schemes would be severely lessened. And of course tax rate should be equally low since we're basing on revenue and not profit.

The biggest problem is that companies are all put under one big umbrella as far as what they do. If you could say "well company A makes widgets, so they can deduct the cost of materials to make said widgets, and we'll tax them on the net of that" and I would be happy equally happy. However we don't have tax laws that state that, they allow companies to essentially spend their money on anything and call it a business expense, fancy private jets, corporate retreats in expensive exotic locations, buying up another company just because they can, and this is where it becomes really easy to get into loopholes.
 
sfsuphysics said:
Easiest fix on this is to tax companies based on their revenue, and NOT their profits, then shifting money around and calling it "business expenses" becomes a non-issue. Kind of like how individual income tax works, I can have all the "expenses" in the world I'm still taxed based upon the money that I take in, not how much of it I actually have left over after paying off everything. (although I realize that quite a few things can be used as "deductions" like having kids, having a loan on a house, etc.)
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It may be an easy fix, but it is in no way the best fix.
 
sfsuphysics said:
Easiest fix on this is to tax companies based on their revenue, and NOT their profits, then shifting money around and calling it "business expenses" becomes a non-issue. Kind of like how individual income tax works, I can have all the "expenses" in the world I'm still taxed based upon the money that I take in, not how much of it I actually have left over after paying off everything. (although I realize that quite a few things can be used as "deductions" like having kids, having a loan on a house, etc.)
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OR, a better fix would be to give these companies the 3% rate they get in countries like Mauritius IF (and it is a big IF) they employ a minimum number of employees who are USA citizens (say 5,000 or 10,000) ... you could also give them different rates depending on the number of employees or the size of their payrolls ... that would encourage job growth, getting something from the companies is better than nothing, and if they had USA employees you could make tax revenue from the workers ... Win/Win ;)
 
sfsuphysics said:
Easiest fix on this is to tax companies based on their revenue, and NOT their profits, then shifting money around and calling it "business expenses" becomes a non-issue. Kind of like how individual income tax works, I can have all the "expenses" in the world I'm still taxed based upon the money that I take in, not how much of it I actually have left over after paying off everything. (although I realize that quite a few things can be used as "deductions" like having kids, having a loan on a house, etc.)
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Taxing revenue kills businesses that are having tough times as meager profits or break even becomes a loss. Countries that tax revenue tend to give their companies financial support when they need it and trade protections among other things.
 
Darcschnider said:
I see this whole tax thing as a downside for US. I know its pressure from US and others, but this pressure could backfire and push the industries to move completely to a lower taxed country. This would in turn backfire as the US who wasn't getting much would be getting even less if these tech companies move. The other side of that as well is if these giants leave it will leave a huge hole in economy and even potential job changes.
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The latest pressure is coming from the EU, whether its partly US pressure indirectly, the backlash against US tech companies, or EU unhappy with Ireland competing with other countries for jobs in a way most EU countries would begrudge to compete, we'll never really know.
 
All I know is at one point in time that is coming very soon the only people going from poor to rich will be lotto winners. There is too much red tape to even get off the ground these days and you need millions of dollars that poor people just don't have lobby for advancement with governments.

Time for a new system or we're all fucked.
 
Darcschnider said:
I see this whole tax thing as a downside for US. I know its pressure from US and others, but this pressure could backfire and push the industries to move completely to a lower taxed country. This would in turn backfire as the US who wasn't getting much would be getting even less if these tech companies move. The other side of that as well is if these giants leave it will leave a huge hole in economy and even potential job changes.
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Yes that sounds true, because of the government we have. In truth the solution would be simple:
Ok you can leave, but then you are getting hit with import tariffs.. and yes we can apply tariffs to general products, say cellphones.. so apple go ahead leave, to sell your crap here in the US, you are going to pay x% of tariffs.

It could work just fine.

In the end, it really looks like corporations are taxed too little, and they are getting lazy, investing too little as a consequence.
 
Uvaman said:
Yes that sounds true, because of the government we have. In truth the solution would be simple:
Ok you can leave, but then you are getting hit with import tariffs.. and yes we can apply tariffs to general products, say cellphones.. so apple go ahead leave, to sell your crap here in the US, you are going to pay x% of tariffs.

It could work just fine.

In the end, it really looks like corporations are taxed too little, and they are getting lazy, investing too little as a consequence.
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dunno... I think part of the problem is old thinking new world.

Everything is soooo global now that we can easily transport product and communicate globally.

It really exasperates the differences in costs of living, we are seeing this with off sourcing our manufacturing. Its not that XYZ (china etc) country is sooooo much cheaper, its the labor. Cost of living means they can literally work for 10% what US workers can. Yes there is some additional overhead in safety regs but labor is the big dollar budget.

Globalization is also bringing consumerism to more countries. There will be a day where China etc will have mire buying power then the US, then companies could say F*%$ your tariffs I make plenty in the rest of the world.
 
Uvaman said:
Yes that sounds true, because of the government we have. In truth the solution would be simple:
Ok you can leave, but then you are getting hit with import tariffs.. and yes we can apply tariffs to general products, say cellphones.. so apple go ahead leave, to sell your crap here in the US, you are going to pay x% of tariffs.

It could work just fine.

In the end, it really looks like corporations are taxed too little, and they are getting lazy, investing too little as a consequence.
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Tariffs are a 19th Century solution to a 21st Century problem ... they also tend to be very anti-consumer in nature ... there is no way for any country (even the USA) to be totally self contained ... also, there are many reasons to outsource ... manufacturing isn't always the most pleasant job or business to have (it can introduce environmental issues and for complex products, like modern electronics, the supply chain issues can be daunting) ... one of the big advantages to the big offshoring location (Mexico, China, etc) is that a lot of the suppliers of components are already there ... moving your manufacturing closer to your suppliers can save billions in inventory costs and transportation ... the USA needs to revamp our entire tax structure (including the corporate taxes) ... if we have really become the consumption economy that everyone thinks we are then we might need a VAT or some other form of consumption tax ... tariffs won't do anything but start a trade war (which is bad for everyone)
 
MrGuvernment said:
Interesting as Dublin is getting a massive influx of tech companies, Intel just invested $5billion in Dublin to turn the place into a "tech town" and Google, Facebook and other large companies are opening offices there if not already.
Click to expand...

Intel has been in Ireland since 1989.
Google has had it's EMEA HQ in Ireland since 2003.
Facebook has had it's International HQ in Ireland since 2009.
Microsoft has had offices in Ireland since 1985.
Apple has had a major distribution/support centre in Ireland since 1980.
Cisco has had operations in Ireland since 2007.
Oracle has had offices in Ireland since 2005.
Paypal since 2006.
Yahoo since 2003.
Ebay...
Linkedin...
Twitter...

I could keep going, but basically it's safe to say they are already here :p
 
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