Fine Gael TD and junior minister Damien English launching the party’s Investing in the Early Years Plan in the CHQ Building, Dublin before the election in February
I was somewhat surprised to learn that Fintan O’Toole takes his policy views from US talk radio (I would have thought he was more a Guardian reader myself) but that probably explains why his view on foreign direct investment and Ireland’s industrial policy is so out of touch with reality.
The taxation of multinationals is based on the source principle. Countries tax the profits from operations located in their countries. Although some of the world’s largest companies have operations in Ireland, we can only tax them on the profit they generate from their activities in Ireland. This we do.
The issue being debated in the US at the moment, however, relates to a loophole in the US tax code which allows “deferral” of corporate income taxes, and allows US multinationals to delay certain tax payments until the profits are transferred to US-incorporated entities in their corporate structure.
Some companies (not surprisingly) are trying to defer payment for ever. We aren’t the problem. The US tax code is.
Indeed, the US treasury secretary has written to the European Commission stating that while the US does not collect the tax until repatriation, the US system of deferral “does not give EU member states the legal right to tax this income”.
Ireland’s 12½ per cent corporation tax rate is a key part of our offering to multinationals but it is not the only reason they come here.
We offer access to EU markets, a well-educated and a highly skilled workforce. Winning the war for talent is critical to our future success.
That is why my work as Minister of State for Skills, Research and Innovation was focused on making sure we continued to foster and develop Ireland’s talent pool through a new innovation strategy and a new skills strategy.
I look forward to hearing Fintan explain the real facts of the matter to Rush Limbaugh or the good folks who listen to the News from Lake Wobegon.
Damien English TD
Minister of State for Skills,
Research and Innovation,
Leinster House, Dublin 2.
Ireland, taxation and multinationals (Irish Times letters page)
Related: Fintan O’Toole: US taxpayers growing tired of Ireland’s one big idea (Irish Times)
Sam Boal/Rollingnews
“Ireland’s 12½ per cent corporation tax rate is a key part of our offering to multinationals but it is not the only reason they come here.”
But fiddle with it and they’ll be out the door faster than James Reilly on a boiled ham. Make up your mind, Damo.
Not necessarily…..done properly (I know, I know) we could raise the corporate tax rate and the boost in revenue from extra tax would be greater than the lost tax in companies leaving due to the raise. There is a cost to a company upping sticks and moving to get a better tax rate, the cost is prohibitive to companies of a certain size because it would take them years to recoup the benefit of the lower tax rate vs the cost of moving.
A lot of companies are ‘locked in’ to staying here for the medium term at the very least.
The view that even the slightest change in our corporate tax rate would result in a flight of companies fro the state is incorrect, and either from an view point of ignorance or deceit from vested interests.
I totally agree, but that’s the orthodoxy you’re up against.
They’re adamant our bargain-basement, beggar-my-neighbour tax rate is only an incidental consideration for foreign companies locating here, and in the next breath tell us that if we raise it, or even remove the odd loophole that those same companies will disappear overnight.
‘our bargain-basement, beggar-my-neighbour tax rate’
This is completely exaggerated. The UK has a rate of 17% now & a whole series of other tax measures which are less clear-cut than the Irish 12.5% but potentially more lucrative & generally aimed in a beggar-thy-neighbour method to attract wealthy or specific industries.
The effective rate of corporate tax rate in France is lower than in Ireland but set up largely to suit large French businesses.
Both these countries also used their size to bully large multinationals to move operations & taxes away from smaller countries like Ireland & towards their jurisdictions. Those parliamentary select committees hauling google executives over coals are part of this effort.
Care to script your own responses, Yanni doesn’t appreciate copy & paste
What a snidey little fk. Kicking APHC listeners when we’re down. I hope the arse of his trousers splits and his dog starts weeing in the house.
If we did not have foreign (generally American) direct investment this country would be an economic wasteland.
The smugness that it would generate in the likes of FOT could be packaged and sold off around the world. We’d be as rich as the Saudi’s on that export alone.
MNCs only provide 3/10 jobs here. Where do you clowns get off peddling your scaremongering BS?
Did he really say ‘winning the war’ on talent…?
Yea, so?
So, Mr English is saying that if America plugs it’s tax loop hole we’ll have NOTHING to worry about because of our skilled, English speaking workforce on the edge of Europe.
I tell ya what Mr English, I’d bet many would leave if we actually charged the full 12.5% tax, never mind what’ll happen WHEN the tax loophole is actually fixed.
A career politician, with little to no experience other than maintaining his career as a politician is not the person I’d be taking heed from.
“Ireland’s 12½ per cent corporation tax rate is a key part of our offering to multinationals but it is not the only reason they come here.”
You read that as him saying “NOTHING to worry about”, when in fact he admitted it was a key part of the offering?
The effective rate is closer to 4% overall, across the multi-nationals, with some paying half that.
Yeah, 12.5% my proverbial
You referenced the closing of the loophole. The loophole has nothing to do with the effective rate of tax charged. Your argument was that English claimed we’d have NOTHING to worry about, even though he actually said it was a key part of our offering. Don’t deflect with a separate issue as regards the charging system for the 12.5% rate.
English does say that because we have a 12.5% rate we have nothing to worry about if the yanks close the tax loop hole… because of the other reasons, geographical position to Europe, English speaking and skilled labour….
That much he does say.
What he doesn’t say is that the 12.5% is only key because the effective rate is half that, and less… as low as 2% for some! This means, it’d be stupid to treat charging issues separately when clearly they are extremely important.
You can’t say some company is here because of them even though you know 12.5% is in practical terms a nonsense and a lie. They’re here for the lesser discounted rate of closer to 2%.
12.5% is not key, 2% to 4% is key. The system of charging IS important, and not separate.
So, English IS talking out his hole.
Ok, he literally does not say that. Sorry. Here is what he says:
“Ireland’s 12½ per cent corporation tax rate is a key part of our offering to multinationals but it is not the only reason they come here.
We offer access to EU markets, a well-educated and a highly skilled workforce. Winning the war for talent is critical to our future success.”
So there’s two issues which seem to be important. One if the tax rate, which is “key”. The other is winning the war for talent, which is “critical”. This really couldn’t be any clearer.
Yes talent etc. is important. Cutting it as you have, to two factors, you seem to take the notion that one carries the same weight as the other. I don’t.
One factor does not carry the weight of the other, IMO, particularly when one of the factors is a lie, the 12.5% is not real.
Career politician, now that’s harsh Clampers.
I’ll have you know Mr English has Damien has a Diploma in Management Accounting!
Everyone knows that this makes you a tax expert and NOT a smart arse know all know nothing :-)
He’s exactly right. These companies make billions globally, this is true, and they don’t pay as much taxes as they should, this is true, but to think that Ireland is entitled to 12.5% of the billions they make globally is a dream. It’s creative bookkeeping that has some of those funds pass though here but Ireland is not their origin. They should be taxed at source and it is up to the countries where the money is earned to ensure that they get their own take.
What’s laughable is that the finger is pointed at Ireland or other countries by the U.S. and France and others because their own tax structure isn’t robust enough to ensure tax is paid on what is earned within those counties (the tax is essentially avoided by paying royalties or consulting fees to partner funds in lower tax countries). They need to fix this. Though the EU has a white paper out that will help significantly, within the EU at least.
What is also laughable, in the extreme, is parties like the AAA whose economic policy is based on Ireland taking 12.5% from the billions multinationals earn globally because they have a HQ here. That is tax that should be paid in other countries. They are actually proposing robbing tax that should be paid elsewhere, so much for global solidarity.
blushirt pond life, would sell off our water supply to appease billionaire corporations.
+1
“Winning the war of talent” – a nice way of saying that tax avoidance in their own country means less revenue for investment in public services like education.
Global corporates have no sense of social responsibility in their place of origin when they can go anywhere for their skilled workforce.
How many of that “talent” that are currently gentrifying Dublin 8 work in software engineering if it’s not about the 12.5%?
Not sure how many of the companies in the Digitial Hub / Guniess Enterprise Centre are paying 12.5%
Who would’a thought there’d ever be a more smackable face that Geraghty up there in Mead
Ireland takes money not earned on this island and makes it nice and clean to send back to shareholders not on this island.
Let’s get real.
The very building he made this speech in is a symbol of everything rotten that the last government allowed to happen.
CHQ was restored by the Dublin Docklands Development Authority (DDDA) in 2006 at a cost of €45 million. It was then sold to US multimillionaire Neville Isdell for €10m. It is now conservatively worth double that. When Mr. Isdell sells it, he will pay no Capital Gains Tax as FG offered a CGT exemption to (almost entirely foreign) property investors during the crash. FG then rented space there as election HQ, wonder what they paid in rent?
Don’t have exact figures but I believe FG offered sloppy blowies from the minister of their choice.