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Country Rankings - Ireland

  • May 01, 2018   Ireland: robot-less

    Staying on a technology-related theme, I now turn to the subject of special tax regimes for income from intellectual property, usually known as IP or patent boxes. Such tax incentives have proliferated in the past few years, but are they all they're cracked up to be? If the unenthusiastic take-up of Ireland's new Knowledge Development Box (KDB) is used as a bellwether, the answer is an emphatic no. Of course, this is just one of many examples. However, the disappointing KDB figures revealed by Irish Finance Minister Paschal Donohoe in parliament recently are an indication perhaps that we have reached patent box saturation point, at least in Europe. Not only this, it almost goes without saying that patent boxes must be worth a company's while to claim. So if the process is too long-winded, bureaucratic, expensive, and difficult to comply with, it is hardly going to encourage firms to apply, just for the sake of shaving a few percentage points off their overall tax rate. The latter point could be especially relevant in Ireland's case. The KDB offers taxpayers an effective rate of tax of 6.25 percent on qualifying IP income. Which, on the face of it, is a very attractive outcome. But maybe the fact that the ordinary rate of corporate tax is already low at 12.5 percent diminishes the value of this incentive somewhat. However, Donohoe, probably unintentionally, said something very revealing when he told parliament that the low number of KDB applications could be due to the fact that companies have a two-year window in which to make an application "given the large amount of documentation that is necessary." Two years? Perhaps the Revenue Commissioners should think about borrowing one of HMRC's robots.
    Source: https://www.tax-news.com/news/Irish_Knowledge_Development_Box_Off_To_A_Slow_Start____76752.html

  • Apr 20, 2018   Ireland: eyes not smiling

    When it comes to economic and tax developments, Ireland doesn't do half measures. Most countries are accustomed to riding the ups and downs of the economic cycle, but Ireland has made the experience something of a rollercoaster, from the roaring Celtic Tiger economy of the 1990s and 2000s, to the country's near-bankruptcy at the nadir of the global financial crisis when, at one point, the Government reported a budget deficit in excess of 30 percent. You might have thought that this stomach-churning ride through boom and bust might have tempered ambitions and expectations in Ireland. But not a bit of it. In 2015, GDP was estimated to have grown by a massive 26 percent, although that figure was, it turned out, greatly distorted by a few large assets transfers connected to corporate inversions by US multinationals. Nevertheless, the economy has still been growing in the ball park of five percent, a level which most developed economies can only dream of. And in another indication of how Ireland doesn't do things by halves, in 2016 it attracted in excess of 12 percent of all US foreign direct investment in Europe, despite representing only one percent of the European economy, says the American Chamber of Commerce in Ireland. But, could all this be about to change in an equally spectacular way? Corporate tax reform in the United States is likely to be a game-changer for global investment flows, even though nobody is quite sure how things will change, at least not yet. Then there is BEPS – a project designed to neutralize the tax advantages of the Irelands of this world. And while Ireland appears to have suffered no adverse consequences yet at the hands of international BEPS measures, another tax risk has just appeared on the horizon in the form of the very real prospect of new taxes on digital companies, many of which report their income in the Republic. Have I mentioned the proposed EU common consolidated corporate tax base yet? Well you can add that to the list of tax threats then, just for good measure. It doesn't stop there either. Ireland is also uniquely exposed to Brexit by virtue of its close trading links to the United Kingdom and the presence of a land border with the UK separating the Republic from Northern Ireland. With the expectation that Brexit will be towards the harder end of the exit spectrum, a result which could throw up new barriers to trade between Ireland and the UK, Irish businesses are growing increasingly concerned about future trading conditions, which sooner or later may translate into reduced economic confidence. Judging by Ireland's recent economic extremes, this is not a good omen. Not that I'm calling the likelihood of another massive recession here; if Brexit has taught the world anything, it is that economic forecasting is a hazardous occupation, especially if you value your reputation. Indeed, on the face of it, Ireland's economic fundamentals remain sound, propped up by its unwavering commitment to its 12.5 percent corporate tax, and its political stability and legal predictably – favorable characteristics not always shared with Ireland's competitors. And this suggests that investors aren't about to desert Ireland en masse any time soon. Still, it's hard to escape the conclusion that there are storm clouds on Ireland's economic horizon. And it remains to be seen what the Government can do to navigate through them unscathed. Yes, never a dull moment where Ireland is concerned. And the same could be said if you use virtual currencies, either for investment purposes or as a medium of payment. Not only because of the thrills and spills of the highly unstable Bitcoin market – price volatility that would make the toughest New York trader's eyes water. But also because of the propensity for the tax man to spring a surprise or two on you – and rarely in a nice way.
    Source: https://www.tax-news.com/news/Global_Tax_Trade_Policies_Could_Dent_Irelands_Growth_Potential____76722.html

  • Nov 21, 2017   Ireland: competitive

    Tax reform is expected to not only have a transformative effect on the US itself, but also internationally, as US and foreign investors shift more investment to America. And Ireland is one country worried about the impact of the proposed corporate tax cuts and foreign dividend exemption in the US. Brexit is often identified as the greatest danger to the Irish economy, given its strong commercial links to the United Kingdom. But, with Ireland's trade and investment links to the United States arguably even more significant, the economic fall-out could be more serious than a hard Brexit. Statistics attest to how Ireland's economic fortunes are intertwined with those of US investors. US investment in Ireland totals USD343bn, and while Ireland represents just 1 percent of the European economy, it attracted 20 percent of all US FDI investment to Europe in 2015. Some 150,000 people are now employed by American firms in Ireland – around 7 percent of the workforce. So it almost goes without saying that if substantial numbers of US investors began pulling out of Ireland, this could be disruptive for the economy. But perhaps the risks are being overblown. The United States may become more competitive relative to Ireland if its tax reforms go through. But this won't necessarily diminish Ireland's competitiveness. Its low corporate tax is unlikely to change any time soon, its membership of the EU makes it a convenient entry point into the EU markets, and there are a range of other factors beyond these two key advantages that attract foreign investors from the US. Fergal O'Brien, Director of Policy and Public Affairs at Ibec, put it well recently when he said that US firms "will still find Ireland a compelling investment location."
    Source: https://www.tax-news.com/news/Brexit_Will_Be_A_Challenge_Irish_Finance_Minister_Says____75783.html

  • Oct 18, 2017   Ireland: baby steps

    We often refer to Ireland's corporate tax advantage when discussing international tax issues and the competition for foreign investment. Less discussed beyond Ireland's shores, I'm sure, is its individual income tax disadvantage. While Ireland's top rate of personal income tax at 40 percent (recently reduced from 41 percent) is broadly in line with other European countries, it kicks in at a relatively low amount of income (EUR33,800 in 2017). When Universal Social Charge – brought in as part of Ireland's fiscal retrenchment deal with its bailout creditors – is factored into the equation, this has resulted in a marginal tax rate of over 50 percent for some, which places Ireland among the Nordic nations in terms of individual tax. By comparison, the UK's higher 40 percent rate of tax applies to income exceeding GBP45,000 this year, which is the equivalent of more than EUR50,000. Unsurprisingly then, there has been something of a brain drain of Ireland's best and brightest across the Irish Sea in recent years. Indeed, overwhelmingly, entrepreneurs in Ireland believe that the country's personal income tax system is the single-biggest deterrent to those interested in establishing and growing a business in the country, if the results of a recent survey by EY are to be believed. Of the 160 entrepreneurs from Ireland who were previously finalists in the firm's Entrepreneur of the Year program, 72 percent expressed this opinion. In fact, while Ireland excels on corporate tax, it hugely disappoints on individual tax. According to IBEC, Ireland's main business and employer association, it is misleading to label the country as "low-tax" just because it has a 12.5 percent corporate tax rate. In 2014, IBEC said the individual income tax burden as a percentage of GDP was 11.6 percent in Ireland, comfortably above the EU average of 9.5 percent. And according to the OECD, Ireland's tax system is one of the most progressive in world. Finance Minister Paschal Donohoe deserves some praise for recently calling out the injustice of the current situation, describing it as as "unsustainable" and "unfair." And the Government is at least attempting to alleviate the tax burden on the middle class. But it's a slow old process. The marginal tax rate on income up to roughly EUR70,000 ticked down to 49 percent as a result of tax measures announced last year, and will ease to 48.75 percent under changes announced in the 2018 Budget last week. Hang on to your hats! At this rate, it's difficult to forecast what will happen first – a top marginal rate of 40 percent or humans setting foot on Mars. But this isn't necessarily all the Government's fault. It is still locked into achieving certain fiscal targets. And there simply isn't room to go slashing personal tax. What's more, it seems to have accepted that high personal taxes are a price worth paying for low corporate tax, and all the investment and employment it leverages for Ireland. So perhaps Donohoe should be wary of making any rash promises, lest they come back to haunt him and his government.
    Source: https://www.tax-news.com/news/Irish_Budget_Delivers_Modest_Income_Tax_Cuts____75460.html

  • Jul 18, 2017   Ireland: hospitable

    As I pointed out at the start, following on from this rule is the one that proclaims "thou shalt not permanently enshrine a tax cut." But even that rule hasn't held fast recently. I refer to Ireland, where in the depths of the financial crisis, the Government of the day introduced a temporary reduction in the rate of value-added tax for tourism and hospitality-related services, at a time when the Irish economy needed all the help it could get. Several years on, the Irish economy is almost roaring like the Celtic tiger of old, yet there have been few indications that the Government intends to restore VAT on these services to 13.5 percent from nine percent. Until now. According to new Finance Minister Paschal Donohoe, the temporary tourism VAT cut, like Germany's solidarity tax, has "done its job," suggesting that the end is nigh for this temporary tax break. He didn't say it in so many words — starting your career as a finance minister with a tax hike is hardly going to win you any popularity contests — but perhaps we can expect the measure to be buried in the fine print of the next Budget. Some things, at least, never change.
    Source: http://www.tax-news.com/news/Irish_Tourism_VAT_Rate_Has_Done_Its_Job____74697.html

  • Mar 14, 2017   Ireland: resilient

    As we wrap up this week's edition, we stay on the theme of reform. And of all the countries in the world, Ireland isn't one I'd point to and say "boy, that's a country in dire need of deep and comprehensive corporate tax reform." But with Ireland facing the twin specters of Brexit and a possible competitive threat on tax from the United States – its largest source of foreign direct investment – this is exactly what the business association IBEC thinks the country requires. With one third of employment in Ireland linked to sectors that export heavily to the UK according to financial services provider Merrion Capital, Ireland is rightly worried that Brexit will destabilize its relationship with a vital trade partner. And a recent survey by PwC has revealed a level of pessimism among Ireland's CEOs in relation to the Brexit-effect on Ireland, with almost three quarters of those surveyed predicting that the outcome would probably be negative for the country. Now President Donald Trump has added to Ireland's woes with his promise to throw up trade barriers, and to slash corporate tax to almost Irish levels. How will Ireland cope if these developments come to pass? So, it is not surprising that amid all these uncertainties, Ireland is a worried nation, as demonstrated by the regular news items attesting to its economic anxieties. Because, as we know, uncertainty is one of the investment community's biggest turn-offs. But it could be argued that stability, rather than a rush reform, is more preferable in this instance. And the Government is probably being sensible by resisting such calls for now. Let's not forget, Ireland has recent experience of deep crisis, and it didn't panic then. Things seem to have worked out okay...
    Source: http://www.tax-news.com/news/Ibec_Major_Overhaul_Of_Irish_Business_Tax_Offering_Needed_____73683.html

  • Jan 09, 2017   Ireland: smiling

    Despite the shock of Brexit, 2016 turned out to be a good year for Ireland – for the Government and the economy. Last week, Finance Minister Michael Noonan said that the amount of tax collected in 2016 "is at an historic high." Meanwhile, the number of Irish jobs supported by foreign direct investment reached a record of almost 200,000 in 2016, according to the Irish inward investment support agency, IDA Ireland. At 244, the number of investments was also at a record high. There are a number of reasons why Ireland remains attractive to foreign investors. But the Government's commitment to a low corporate tax is undoubtedly one of them. Another is the country's continued membership of the European Union, with the Irish showing no inclination to follow their neighbors across the water in deciding to leave the EU. However, both of these factors have turned out to be doubled-edged swords in some ways. Ireland's favorable corporate tax regime has placed it firmly in the crosshairs of the OECD and the EU as they bid to tackle BEPS, and changes to the tax framework are likely to be ongoing. And while Ireland has undoubtedly benefited from its EU membership, the EU hasn't always been Ireland's friend, especially in the area of taxation. Indeed, some warn that the repackaged plans for a common consolidated corporate tax base pose a major threat to the Irish corporate tax base, should they ever be introduced. Furthermore, the European Commission's Apple ruling has had a very unsettling effect. Nevertheless, despite its recent economic travails, Ireland has fought its corner robustly on such issues, and there are few indications that this will change this year.
    Source: http://www.tax-news.com/news/2016_A_Good_Year_For_Irish_Public_Finances____73131.html

  • Dec 01, 2016   Ireland: match fit

    Brexit is not only a major preoccupation of the UK, however. Ireland is also spooked by the prospect of the UK's withdrawal from the EU, which is understandable given the strong trading links between these two neighbors. This had led to calls for the Government to urgently review the tax system and make any necessary changes to ensure that it is "match fit" for a potentially turbulent future, to coin Hammond's favorite new phrase. For example, Ireland's Small Firms Association said the Government needs "to become obsessive" about the country's tax competitiveness in relation to the UK. But perhaps there is a case for some Hammond-esque caution to be exercised in Ireland too. Otherwise it might fall into the trap of thinking it needs to constantly update its tax system or fall behind. Such a course of action might actually be counterproductive. There's a risk that Ireland could fall behind because it is constantly updating its tax system. When it comes to the taxation of businesses, the latest Paying Taxes Index from PwC shows that actually, Ireland is already ahead of most of the competition anyway. Therefore, change in this area could well do more harm than good. As President Reagan used to say, if you find yourself in a crisis, "don't just do something. Stand there!"
    Source: http://www.tax-news.com/news/Ireland_Most_Effective_Place_In_EU_To_Pay_Business_Taxes____72803.html

  • Oct 19, 2016   Ireland: steadfast

    Across the pond now, and as government budgets go, Ireland's 2017 Budget announcement was a fairly low-key affair which to most people would barely merit a blip on the international radar. However, where Ireland is concerned, the interest lies in what the Government won't do on the tax front, rather than what it ]actually has done, which this time around isn't a great deal except tinkering at the edges of the tax system. When all is said and done, perhaps Ireland's greatest achievement of modern times is hanging on to its 12.5 percent rate of corporate tax. For while Ireland has copped enormous flak from many quarters, notably the powerful bits of the EU, for its benign corporate tax regime, it is clear that this has underpinned heavy investment in the economy – Ireland accounts for an astonishing 25 percent of all inward FDI in the EU – and the country would probably be a lot worse off at this state if this advantage was removed. While the international bail-out program has obviously helped Ireland get back on its feet after it threatened to go the way of Greece – a 32 percent budget deficit was recorded in 2010 – the country wouldn't have survived on IMF/EU cash alone. Strong levels of investment, even in the depths of the crisis, and particularly by American companies, must have contributed heavily to Ireland's economic revival. Therefore, the Government's reiteration of its determination to hold the rate of corporate tax was probably the first thing that companies looked for in the Budget texts.
    Source: http://www.tax-news.com/news/Irish_Budget_Eases_Tax_On_Workers____72464.html

  • Dec 07, 2015   Ireland: smiling

    Now, I have a question. How come corporate tax receipts in Ireland account for roughly the same percentage of overall revenue – about 8 percent in 2014 – as they do in the United Kingdom (just under 10 percent in 2012) and the United States (also just under 10 percent in 2010) when corporate tax in Ireland was half the UK rate in 2012, and about a third of the US's? I could direct that question to the Chancellor of the Exchequer in London, and the Treasury Secretary or any number of senior Congressmen in Washington, but I think they get it already. High corporate tax rates don't necessarily produce high levels of revenue, because they encourage avoidance and discourage investment. Which is why corporate tax rates have been steadily falling all over the world in the last 10 years or so. And which probably accounts for yet another corporate tax windfall for the Irish Exchequer. I think even Francois Hollande gets it now. But I think the "high tax good, low tax bad" brigade in Brussels will take some convincing.
    Source: http://www.tax-news.com/news/high_tax_revenues_contribute_to_ireland_budget_surplus____69855.html

  • Oct 19, 2015   Ireland: different

    The Irish Budget, announced by Finance Minister Michael Noonan on October 13, is certainly a measure of the Government's confidence, with it gradually loosening the fiscal reins. As requested by business representatives on a regular basis in the weeks prior to the budget statement, Noonan cut Ireland's high marginal personal income tax rate, reduced the scope of the Universal Social Charge, and addressed the tax disadvantages that self-employed individuals experience relative to their salaried peers. Having said all this, Ireland remains vulnerable. A slow-down in the US could reduce that flow of foreign investment, and the country has a large debt overhang, to the tune of 120 percent of GDP, as a consequence of the crash and the bailout by the IMF and the EU. What's more, the conclusion of the BEPS project within which Ireland was demonized, unfairly, as an arch base eroder has the potential now to stymie investment flows over the next few years. Given these uncertainties, all the Government can really do is stick with what is working.
    Source: http://www.tax-news.com/news/Ireland_Slashes_Taxes_Again_In_New_Budget____69406.html

  • Aug 10, 2015   Ireland: not smiling

    If there are any taxpayers in Ireland who think that their corporate tax rate is too high, they must be in a very small minority. Indeed, generally speaking, investors seem to be satisfied with the Government's economic and tax policies. However, there are growing murmurs of discontent among business representatives regarding Ireland's relatively high personal tax burden. It is certainly true that the income threshold at which Ireland's 40 percent higher rate of personal income tax starts is relatively low, at EUR33,800 (USD36,750). But the business association Ibec has been particularly strident on this issue, and actually argues that Ireland's low-tax credentials are being overstated. According to Ibec, since 2010, Ireland has experienced a sharp jump in taxation of personal incomes as a percentage of national income, rising from 8.7 percent to 11.6 percent, well above the EU average of 9.5 percent. This means that Ireland is the 5th highest tax jurisdiction for personal incomes in the EU. Ibec says that the high marginal tax rate at modest wage levels introduces a disincentive to work for both Irish people and skilled employees from abroad. It has calculated that a skilled graduate moving from gross pay of EUR20,000 to gross pay of EUR60,000 over the first ten years of their career will see an increase of annual net pay of just EUR22,888 in Ireland, while the same person in the UK would see an equivalent increase of EUR30,287. AS a result, skilled graduates in the UK would be more than EUR5,000 a year better off. "Despite regular claims to the contrary, Ireland is not by any measure a low income tax country," says Ibec. That's certainly food for thought.
    Source: http://www.tax-news.com/news/CEOs_Concerned_About_Irish_Tax_Burden____68744.html

  • Jun 08, 2015   Ireland: resurgent

    Looking at the two countries now, it is hard to believe that Ireland was once in a similar state to Greece, its banking system broken, its Government with a 30 percent budget deficit and facing bankruptcy, and its real estate market in a tail spin. While commentators continue to talk optimistically about the Greek economy growing again for the first time in six years, Ireland is leading the way in Europe, posting GDP growth of 5 percent last year. What's more, while Greece is living hand to mouth – robbing Peter to pay Paul – Ireland has just turned a budget surplus, and is now beginning to cut taxes, albeit modestly. While the Irish Government must shoulder some of the blame for the mess that led to its bail-out by troika, it also deserves a lot of credit for creating the conditions that have brought about the economic recovery. Central to Ireland's rebound has been its favorable corporate tax system, underpinned by the 12.5 percent rate of corporate tax, which the Government has fought tooth and nail to defend in the face of much pressure from Europe to increase it. Ireland is also worthy of an encomium this week for pursuing other sensible policies in the area of business taxation, such as the recently announced tax rebate scheme for owners of start-up companies, and a national consultation on small business taxation that will hopefully lead to the removal of other tax barriers deterring people from starting their own businesses. Having said all of this, Ireland's battles are far from over. In the eyes of the OECD and supporters of its BEPS program, Ireland has become, unjustifiably, synonymous with all that is bad in the world of international corporate tax planning, and there are many in the corridors of power in the US and the EU, among others, who would dearly love to see Ireland's corporate tax rate dragged up to their own uncompetitive levels. Time will tell if Ireland will be too outnumbered to resist the changes taking place internationally, but let's hope that the Celtic Tiger is permitted to roar once more.
    Source: www.tax-news.com/news/Ireland_Pledges_To_Ease_Tax_Burden_On_SMEs____68222.html

  • Jan 15, 2015   Ireland: without a hiss...

    One only has to look at what is happening in Ireland for evidence to discredit Levin's logic-defying position. Taxes have of course risen to help fill the yawning fiscal gap left by the financial crisis, but by no means dramatically. In fact, according to OECD data, the tax burden as a percentage of the economy at 28.3 percent (2013), is lower than it was in 2000 in the midst of the "Celtic Tiger" economy. But tax revenues are now rising fairly sharply – the Government's Exchequer Statement for 2014 shows that tax revenues grew by more than 9 percent year-on-year, with income tax up 8.9 percent, corporate tax up by 8.1 percent and VAT receipts higher by 7.9 percent. The same OECD stats show that the tax burden did rise relatively sharply, by 1 percent, from 2012 to 2013. But according to the Irish Finance Department, recent revenue improvements are indicative of underlying improvements in the economy, rather than tax increases. But perhaps the key figure in all this is Ireland's 12.5 percent rate of corporate tax, which remained on hold throughout the crisis when there was intense international pressure on Dublin to hike it. Despite this low rate (or perhaps because of it) Ireland takes only slightly less in revenue from corporate profits as a proportion of the overall tax take than the OECD average – 8 percent versus 9 percent. And the average corporate tax rate in the OECD is much higher, at about 25 percent. Yes, you can argue just about any way you like with statistics. But it is hard to ignore the fact that foreign companies continue to beat a path to Ireland's door. IDA Ireland, the country's FDI promotion agency, has said that the Government's tax roadmap, which continues to offer businesses a low-tax future (albeit without helpings of Double Irish Dutch Sandwiches), is directly responsible for a surge in employment levels at its client companies, to the highest level in the agency's history. And let's not forget that it's not only companies that pay tax, the people they employ do too, who then go on to pay yet more taxes on the things they consume with their incomes. A sort of virtuous circle if you like, if the tax rates are set right. Of course, it's a shame that we're at a stage in history where governments, in debt over their heads and with little hope of ever paying it off, have got themselves into a situation whereby tax policy is set to maximise revenues, rather than to reflect the price of living in a civilized society. But alas, this has been the way of things for centuries. As Jean-Baptiste Colbert, Louis XIV's esteemed finance minister, observed in the late 17th century, "the art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing." Low-tax countries are, generally speaking, just as interested in raising as much revenue as they possibly can. But at least they are much gentler on the goose.
    Source: www.tax-news.com/news/Irish_Tax_Policies_Secure_Increasing_Inward_Investment____66913.html

  • Oct 23, 2014   Ireland: mischievous

    So, in the great stand-off between Ireland and the OECD, Dublin has been the one to blink first, with the Irish Government having announced in the 2015 Budget new corporate residency rules that will put paid to the infamous "Double Irish" international tax planning technique so beloved of American technology and pharmaceutical firms. This is not really surprising, given the amount of pressure Ireland has been under from the international community with regard to its corporate tax regime. What was more unexpected was the speed with which Ireland has acted, especially since it has fought tooth and nail against the likes of the EU and the OECD for years to ensure that Irish tax laws are decided in Ireland. But ultimately, perhaps the Double Irish just wasn't worth the hassle anymore. Physical investment on the other hand, is. Ireland is often maligned for being one of those jurisdictions with a tax regime attracting a lot of corporate profit, but not a lot of corporate substance. This is unfair, and the country's detractors misunderstand (or pretend to misunderstand) what the Government is trying to achieve by having one of the lowest rates of corporate tax outside of the world of offshore: jobs, wealth creation and economic growth. AmCham Ireland, the American Chamber of Commerce's Irish branch, has some quite astounding statistics about the level of FDI pumped into Ireland by American firms in recent years: US companies have USD204bn in FDI in Ireland, more than the total invested in the BRICS economies combined, and during the decade to 2010, US investment in Ireland was triple that of China-bound investment. This has created over 115,000 jobs in more than 700 US firms in the Irish Republic. Pretty impressive for a country with a total population of 4.5m. Certainly, not all that shines in Ireland is gold (or should that be emerald?), and the scale of its banking crisis leaves it vulnerable. But would Ireland be recovering to the same degree it is now, or even recovering at all, if it had put corporate tax up, a move the French and Germans were clamoring for in the bail-out? In fact, it is something of a triumph that Finance Minister Noonan has been able to announce tax cuts this time around given the state Ireland was in just four years ago. And mischievous Ireland hasn't completely caved in by relinquishing the Double Irish. The "Knowledge Development Box" announced in the Budget will almost certainly be considered a "harmful" tax measure by either the OECD or the EU, or both. Let the fun and games begin!
    Source: www.tax-news.com/news/Ireland_Cuts_Individual_Income_Tax_Burden_In_2015_Budget____66126.html

  • Aug 07, 2014   Ireland: righteously defiant

    Ireland must be beginning to feel victimized, harassed even, by the global community of nations. It seems to have taken the blame for rise in base erosion and profit shifting, and now it is seemingly carrying the can for corporate inversions by US multinationals. You have to take your hat off to successive Irish Governments though, after standing up to criticism from the European Commission, the "troika," the OECD and now the US, about its 12.5 percent corporate tax rate. Following President Obama's latest barb, the role of Irish corporate tax rate defender-in-chief fell to Minister for Jobs Richard Bruton, who said that Ireland is much more than just a "brass plate" type of jurisdiction, and is much more interested in physical investment. And the figures do tend to back him up on this. Over 115,000 people are employed by over 700 US firms in Ireland (and it's worth noting that the total population is only just over 4.5m) and collectively US firms have over USD200bn in foreign direct investment there. This equals more than the total invested in the much-hyped BRIC economies, or the whole of South America. President Obama's recent speech on the matter, which singled out Ireland, shows a worrying lack of understanding of the US/Ireland investment relationship. But then again, there is an election coming up, so it's time to start wheeling out the same old tired phrases like "economic patriotism" and "shipping jobs overseas." Yes, we know, it's the economy, stupid! Here's a novel idea for the President and Congress though: if you're truly fed up with US Corp shipping jobs overseas, then cut corporate tax. It might actually help the economy too. Stupid idea!
    Source: www.tax-news.com/news/Ireland_Fires_Back_At_Obama_Tax_Policy_Criticism____65378.html

  • Jul 10, 2014   Ireland: in denial

    Unfortunately, the prevailing consensus among international organizations and (mostly bankrupt) governments is exactly the opposite of the set of attitudes that might lead to a sane economic order. Tax is good, they say. The more tax the better, so that we can afford more "entitlements" (aka electoral bribes). This week there is a perfect example of that from Ireland, despite its status as one of the more liberal Western democracies: "Ireland Not To Blame For Low MNE Tax Burden" says a prominent association. Excuse me! "To blame"? That says it all. They should be proud of that fact that MNE (Multi-National Enterprises, for the acronymically-challenged among you who thought it meant Micro and Nano Engineering) taxation is low in Ireland. In what weird universe have we ended up where more tax is better than less tax? This is why the international organizations such as the IMF, the World Bank and the OECD are so dangerous. I read an article this week in the normally quite sensible Economist magazine which suggested that a new Bretton Woods conference is needed in order to construct a fresh rescension of the original set of institutions. It's true that they have become ossified, have been captured by high-spending bureaucrats, and have transmogrified into instruments of Big Government. But the answer is not to give them yet more power; what we need is a new crusade similar to the market-friendly impetus of the 1970s and 1980s as a result of which redundant mechanisms such as exchange controls were demolished. But where are the Hayecks and the Friedmans of the noughties? or is it the teenies? The only Bretton Woods body that retains its original mission unsullied is of course the World Trade Organization, and one of the most inexplicable aspects of the current paradigm is the casual disregard in which this institution is held by politicians and economists who seem to derive more pleasure from denigrating it than in supporting its work, which has demonstrably resulted in a true bonanza of international commerce. Both Lamy and Azevedo are genuine free-trade warriors, but neither is a Keynes. Perhaps the world has grown too knowing for there to be another Keynes. No flowers will bloom in a field of PhDs. It is depressing.
    Source: www.tax-news.com/news/Ireland_Not_To_Blame_For_Low_MNE_Tax_Burden_ITI____65108.html

  • Jun 26, 2014   Ireland: 1, Brussels 0

    The EU Commission's rather curious attack on countries hosting multinationals smacks of politicking, although the machinations of the Berlaymont (have they finished extracting the asbestos yet?) make the word Byzantine seem like an exercise in transparency. At all events, Ireland has hit back quickly and effectively, sensing yet another concealed attack on its low tax rate, which probably does make up a certain proportion of the Commission's logic. The other two countries in the Commission's sights, Luxembourg and the Netherlands, are also "the usual suspects," with low-tax credentials. It may be significant that the Commission has chosen to act in this way at the end of its current term, possibly wishing to send a pro-OECD message to show that it has taken the BEPS initiative seriously, and it is not difficult to imagine that the OECD, which has seen its BEPS project considerably undermined in the last couple of weeks, particularly from the USA, has played a part in asking the EU to take action before it is paralyzed for several months by the nomination process for new Commissioners and the EU's top jobs, which looks to be more than usually protracted on this occasion. It's notable also that of the three multinationals being picked on, two are American (it's true that Apple and Starbucks are the two most obvious BEPS targets), while Fiat, the third, has strong US connections, and can't any longer be regarded as a truly European company. You see how impossible it is to understand Commissioner Almunia's actual motivation? The one thing you can be sure of though is that the Commission is against low taxation, so inasmuch as I am giving Ireland a bouquet, the EU will descend yet another notch in my fiscal bestiary. "Some multinationals are using tax planning strategies," says Almunia. Shock! Horror! What did he expect? And that, in a nutshell, sums up the EU's problem: it only pretends to support business.
    Source: www.tax-news.com/news/No_Sweetheart_Deal_Ireland_To_Tell_Commission____64982.html

  • Feb 27, 2014   Ireland: to reduce taxes

    So far as our news service is aware, no country is planning to reduce taxes this week, but at least in Ireland they are talking about doing so. The Deputy Prime Minister said as much; and a few days earlier the Finance Minister had said the same. They need to, heaven knows, and they have the right ideas, but I have to wonder where they are going to find the dosh. The budget deficit was 7.5 percent in 2013, and will be 4.8 percent in 2014, according to Government estimates, although external commentators think that is optimistic. Ireland's debt was 25 percent of GDP in 2008, before it started on the suicidal "rescue" of its banks; now the debt stands at 125 percent of GDP, and may rise further. It's hard to make out whether the Government is actually cutting costs: expenditure has gone down, but that is mostly due to the end of the bank bail-out program. Since there are no public-sector strikes, in my book that means there are no savings. With the end of the EU's formal stability package for Ireland, it has been able to return to the bond markets quite successfully; presumably that is at least partly due to the ECB's euro-zone blank cheque. But reducing taxes? I don't see it. If they're saying it, there must be an election around the corner, but one is not due until the spring of 2016 – perhaps this talk means that junior coalition partner the Labour Party is about to jump ship and force an early dissolution?
    Source: www.tax-news.com/news/Gilmore_Hints_At_Irish_Tax_Cuts____63761.html

  • Jan 02, 2014   Ireland: promises not very much

    It's a bad week indeed when the nearest I can get to good news for taxpayers is that there are a certain number of countries thinking about tax cuts, but not promising anything. Ireland, for instance, where the Prime Minister at least said there wouldn't be any tax increases in the next Budget. Ireland emerged from its Troika-imposed bailout program ten days ago, but the Liffey didn't suddenly run with Guinness, and there was no red wine in the public fountains. The grim reality is that taxes are higher than they were five years ago in almost every respect except for the corporation tax rate.
    Source: www.tax-news.com/news/Irish_PM_Mulls_Tax_Cuts____63165.html

  • Oct 24, 2013   Ireland: ticketyboo

    I'm going to give Ireland (Eire, that is) a bouquet for dropping its air travel tax, although it's possible that the credit really belongs to RyanAir and the European Commission (in very unequal proportions). It's like free will: when a human being does something, you can usually prove that they did it in response to external or historical causes. But at the end of the day, they still have to take the action themselves. So, RyanAir may have threatened to remove untold numbers of flights and flight attendants (who would go to live in Warsaw, instead); and the EU may have disallowed the really juicy parts of the ticket tax. But eventually the Government has to act, and it has. Unlike some other governments, which persist in levying this most illogical and destructive of all taxes, notably the UK. We have long ago ceased believing governmental environmental blandishments as regards the ticket tax: it's a money-grab, pure and simple. People have to fly, so let's make them pay for it. Very little demand elasticity, in the jargon. That's palpable nonsense, and governments only pretend to believe it because their policy-making processes are not well adapted to being intelligent. Dramatic swings in holidaying statistics as a result of quite minor economic changes show how much human behaviour can be affected on the margin: people's decisions are far more emotional than rational, and just a small amount of additional tangible evidence can have a quite disproportionate impact on on their final behaviour. Ask the Caribbean, which sees the UK's air passenger duty as a major existential threat to its economies. Nasty as the APD is, it seems counter-intuitive that a couple of hundred pounds could make the difference between spending or not spending five thousand pounds on a Caribbean holiday, but that's how human minds work. I suppose it's partly that people don't like paying away money that is overtly going to be mis-spent. Everyone knows that their government will waste a high proportion of any money that it can get hold of; but tax on aviation fuel (for instance) somehow seems less directly rapacious than APT. Not logical, but then we aren't. So yes, Ministers do have free will, but no, they don't have a clue as to how to exercise it accurately. Except on the Liffey, it seems.
    Source: www.lowtax.net/asp/story/front/Ireland_Dismantles_Air_Travel_Tax____62397.html

  • Sep 26, 2013   Ireland: comes up roses

    "A rose by any other name smells just as sweet" says Shakespeare in Romeo and Juliet, so we need not pay too much attention to the OECD's declaration that Ireland is not a tax haven – and never has been. Apparently he was responding to the European Commission's decision a week ago to begin a preliminary investigation into any special tax deals that may have been granted to multinational companies by Ireland, Luxembourg and the Netherlands, which in turn is linked to the G20's discussions on "base erosion and profit shifting" by MNCs, and, in particular, to the recent controversies in the United States, the United Kingdom, France and Germany over the low taxes collected from American companies, such as Apple, Starbucks and Google. The EU has said nothing officially about such a probe, nor have the countries concerned. The reality is that Ireland has one of the lowest corporation tax rates in the EU, which it has clung onto grimly in the teeth of opposition from the harmonizers in Brussels, who in their pursuit of a "level playing field" would like to root out every tiny vestige of competition in the Union, thereby condemning it to permanent economic decline. So plaudits for Ireland which continues to fly the flag of tax competition, and as a result is the destination of choice for US (and other) companies setting up in Europe. You can imagine how much they hate that fact in Strasbourg and Brussels.
    Source: www.lowtax.net/asp/story/front/Ireland_Not_A_Tax_Haven_Says_OECD_Head____62111.html

  • Apr 18, 2013   Ireland: mistreat China

    One country which is conspicuous by its absence from the TPP talks is of course China. Although there are ongoing negotiations between the Middle Kingdom and various other countries, and China has FTAs with a scattering of other countries, notably including ASEAN and New Zealand, on the whole it is lagging. And it considers itself as an injured party in trade affairs, complaining this week about the level of "dumping" and "counter-vailing" measures it is subject to, particular emanating from the USA. A lot of the problem revolves around the designation of China as a "non-market economy" (NME). For anyone who, like me, finds it extraordinary that China should still be regarded as an NME, a word of explanation is in order: an NME is a country in which the State subsidizes enterprises or indulges in other non-market behaviour, despite WTO rules against it. So, an NME is allowed to cheat, if you will; but the other side of the coin is that for an aggrieved counter-party, the burden of proof is lower in anti-dumping proceedings. China's accession agreement to the WTO allows it to retain NME status only until 2015; but the change is not in China's gift, and both the USA and the EU persist in regarding China as an NME, despite frequent requests from China for them to treat it as a market economy.
    Source: www.lowtax.net/asp/story/front/China_Sees_Itself_Subject_To_Increasing_Trade_Friction____60398.html

  • Jan 24, 2013   Ireland: lends a hand

    One man in Europe who does understand the need to support SMEs is Ireland's Finance Minister Michael Noonan, who announced a set of measures to improve funding and cash-flow for SMEs this week. He also says that Irish banks will provide US4bn of finance to SMEs this year. 'Irish banks' is nowadays almost a euphemism for the state, given the tens of billions of support that Ireland gave to its banks, and which drove the country into its bail-out. I didn't and don't approve of such 'rescues' which destroy more assets than they create, but if the banks then do actually help business rather than shrinking their balance sheets because of new capitalization rules from Brussels and Basle, then, a bit grudgingly, I have to award a mark of approval.
    Source: http://www.lowtax.net/asp/story/front/Ireland_Boosts_Support_For_SMEs____59166.html

  • Dec 13, 2012   Ireland: wants to help entrepreneurs

    Ireland's government published its 2013 budget last week, containing quite a few moderately helpful measures for business, more perhaps than might have been expected given the level of the country's indebtedness. And the Finance Minister continues to talk about developing an alternative tax basis for micro-businesses. But something strange: it's now being talked about only in relation to unincorporated businesses, and no convincing explanation is given as to why limited companies are to be excluded. Is it the Revenue? Is it the EU? I suspect the latter, but no-one is saying. Such schemes are usually very successful, because they significantly reduce paperwork and bureaucracy, even if they don't reduce tax as such. If it is attractive enough, it might tip the scales quite far in favor of being unincorporated; if you are starting a business and need to borrow money, there is already no point in limited liability because the bank will truss you up with personal guarantees, will take your house, etc etc.
    Source: http://www.lowtax.net/asp/story/front/Ireland_Consults_On_Taxation_Of_Micro_Enterprises____58689.html

  • Nov 22, 2012   Ireland: cuts paperwork

    How often does an EU bail-out country reduce taxes these days? That's right: it's unheard of. Well, Ireland hasn't exactly reduced taxes, but it has done the next best thing, which is to defer them for small companies by reducing filing frequency, which gives a cash-flow advantage to the companies and a corresponding disadvantage to the Revenue. Although you do wonder if it may not be self-serving - perhaps it costs more to process all those reams of monthly and quarterly returns than the cash-flow advantage gained on myriads of tiny payments. Then, refunds will be later as well. It would be an intricate calculation; but I won't take back the award - they deserve it just for reducing the amount of form-filling and bureaucracy.
    Source: http://www.lowtax.net/asp/story/front/Irish_Revenue_Reduces_Filing_Frequencies____58240.html

  • Sep 13, 2012   Ireland: cocks a snoot at the IMF

    I'm pleased to see that Ireland is ignoring the IMF's advice on property tax and going with a lower figure for its new real estate tax. The IMF, like the OECD, long ago lost its mildly useful role, in the case of the IMF as a corrective institution for wayward governments. When was the last time that a spendthrift finance minister had to turn back at the airport from yet another international jolly in order to meet his stern-faced IMF task-masters? Now all they do is to recommend governments to tax more and more and more. We'd be better off abolishing both the IMF and the OECD and starting with a clean sheet of paper.
    Source: http://www.lowtax.net/asp/story/front/Ireland_Ignores_IMF_Property_Tax_Advice____57271.html

  • Aug 16, 2012   Ireland: eats forbidden fruit

    The Irish treasury is boasting that new tapering rules have allowed it to extract a hundred million euros or so more in income tax from the highest-earning individuals. There aren't many of them, in fact, fewer than 2,000, and it's not as if they are paying super high rates, just a few percentage points more, taking them up to 30% on their income. The problem, of course, is that it takes only a few business leaders to depart and you have lost back that 100m and more. Actually you'll never know whether you lost it or not. If Joe from Cork decides to move to the BVI and put his next electronics factory in Shenzhen, that's 200m of investment you just lost, and the 300 Irish workers who won't get those jobs won't be paying income tax - they'll still be on the dole. Let's hope that Ireland is getting it right; but in my book this is a mistake.
    Source: http://www.lowtax.net/asp/story/front/Ireland_Doubles_Tax_Take_On_High_Earners____56675.html

  • Aug 02, 2012   Ireland: makes it easier to pay taxes. Oh, goody!

    When I read that the Irish Revenue service claims to have reduced the business taxpayer administrative burden by 25%, I think to myself, well they would say that, wouldn't they. The claim would be a lot more believable if it was in an independent report, if Ireland had a TIGTA as in the States, or a national taxpayer advocate, or even if the Chamber of Commerce said it. On the other hand, it's true that Ireland ranks high up in the World Bank and PwC 'ease of doing business' listings, so I'll give them the benefit of the doubt.
    Source: http://www.lowtax.net/asp/story/front/Irish_Revenue_Reduces_Regulatory_Burden____56578.html

  • Jun 28, 2012   Ireland: isn't anglo-saxon, but who would guess it?

    Good for Ireland, which is continuing to cock all possible snoots at the EU despite its bail-out, refusing to increase its corporate tax rate, and, this week, denying the tired old Tobin horse the chance to nosh on luscious emerald grass. With the UK, Luxembourg and Sweden also resolutely opposed to a financial transactions tax, it will be interesting to see whether the euro-core will persist in their collective dementia. The City must be hoping so, and eagerly awaiting the crumbling of Frankfurt's towers. But the Continentals have a trick up their sleeve, in the shape of drafting which will give the FTT extra-territorial reach, hoping to attack the City from a distance. It's all to play for, but the UK is probably going to have to use some very heavy artillery to see off the threat. Ireland's vote will be important, but Whitehall must be hoping to recruit at least one more country to join the existing gang of four. Poland? The Netherlands are probably too much to hope for, despite their internationalist past.
    Source: http://www.lowtax.net/asp/story/front/Ireland_Will_Not_Participate_In_EU_FTT____56071.html

  • May 24, 2012   Ireland: sticks to low tax rate

    Another counter-intuitive story this week has been Ireland's determination to stick with its low corporate tax rate (after Cyprus, the lowest in the EU). A series of shoddy, venal and sometimes corrupt governments has led the country into its current catastrophic condition despite all the advantages possessed by the Celtic Tiger in the last quarter of the 20th century. Now at least they are clinging on determinedly to the one thing that may help them to avoid final bankruptcy, and that in the teeth of resistance from Brussels and their high-taxing competitors on the Continent.
    Source: http://www.lowtax.net/asp/story/front/Ireland_Will_Not_Budge_On_Corporate_Tax_Rate____55518.html


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