Yes Paul, my very reaction!

The city of London is the tax avoidance capital of the world.
The rich mans piggy bank for hiding ill-gotten gains.
Why would they pay tax on money they have managed to hide from taxation in the uk and pay tax to Europe
Look after No1 go downtown the country is f*cked

His whole “cancel the debt” spiel could just as well apply to us now…:-(

David that’s only partly true. The IFSC services many offshore fund managers who manage Irish domiciled funds, allowing them to sell under the EU’s UCITS legislation. If the tax applies to Irish domiciled funds, the fund managers will simply move them to the UK and have UK firms service them instead. The IFSC employs up to 10,000 people providing these services.

Other banks in the IFSC employ many people servicing FX operations for Irish domiciled banks (as well as UK ones), availing of the low tax on this very profitable business. I don’t agree with the tax in principle, as banks won’t pay, it will be real companies who end up paying when converting their foreign currencies. However if the tax must be levied, it is suicide for countries like Ireland to adopt it if the UK doesn’t.

Dars, yep and thats only 36 % of the world wide total. Every day, 5 days a week. Thats why the politicians are salivating at the prospect of getting a slice of the action.It’s proponents estimate it would yield at least $300 billion a year.

@hottoddy, Thanks for clearing it up, its a bit of a difficult one. The industry is out of control it has cost many states around the world countless billions and ruined many lives. The film Inside Job really highlighted the rogue nature of many of these big firms. The cost of this crisis will never be known but surely the industry with a good bit of the responsibility at its door should pay society back. How its done…… I haven’t got a clue. Its time society faced up to the bullying tactics of ‘we will move the jobs away’. It would be a brave politician/leader to do so but I think thats what we are all crying out for, strong leadership.

Why would any financial institution stay in a Tobin Tax environment if they did not have to. So far this activity tax has been rejected by the US the UK, Japan has said nothing and nor has Hong Kong or Shanghai. The Swiss will go with the majority. In reality, if implemented, this will be a Europe only tax and will lead a catastrophic loss of business from Frankfurt, Paris and Milan etc. You may as well put up the “Closed” signs at the IFSC now.

It is understandable that those who sufferred from the behaviour of the Banks should want a system of extracting revenue from them as recompense.

Their are a number of ways that this can be done without chasing them out of the country. A variety of tax surcharges are available such as a loan assets levy, temporary profits surcharge, special zero rated deposits to the Central Bank just for starters.

Hi Peter. Thanks for your comment. There are a number of countries that already apply some sort of FTT on their finance sector. Indeed,the UK applies a stamp duty on the value of share transactions of 0.5% that raises over £3 billion annually for the UK exchequer. In spite of this tax, the UK has been able to build a huge financial sector in the City of London. if a tax of 0.5% of transactions value has not led to a flight of globalised capital from the UK, then why do you think that a tax set at a rate 100 times lower than that would cause a flight of capital from the IFSC?

*10 times* oops!

One example of why this would be bad news is the Fund Services industry that employs around 10,000 people in the IFSC, largely back-office staff who perform accounting services. The staff a employed in Ireland because many of the funds are based in Ireland and sold globally under the EU’s UCITS programme. Put simply, a fund manager would be taxed on every investment he makes if based in Ireland, but would not be taxed if based in the UK. It would take all of five minutes for the fund manager to up sticks and move to the UK.

The UK only has stamp tax on its UK equity markets as these are listed on the UK stock exchange and cleared through Crest. If it was possible to deal in UK equities from outside the UK and avoid the tax, the market would have moved a long time ago. Having a financial transactions tax in Parts of the EU but not in other parts would be like exempting Bristol from UK stamp tax. Do you really believe Bristol wouldn’t do well out of this?

Hi Hot Toddy, thanks for your comment. My reason for using UK share stamp duty as an example was to show that unilateral taxes on trades are not uncommon. There are plenty of other examples from around the world where the threat/scare of global capital taking flight if a tax was introduced has not been borne out by subsequent events. However, to deal with the specifics. It is proposed that the FTT becomes liable on any trade where either or both parties are located within the Eurozone/EU23-26. Hence, it makes no difference whether the trade is carried out in IRL or the UK, if the other party is located within the Eurozone, etc, the trade will be liable to the FTT. The only likely trades that would avoid the FTT are trades with non-Eurozone/EU23-26 countries or domestic UK trades. Given that global banks, hedge funds, etc set up in the IFSC in part because we are in the Eurozone it is unlikely that such non-Eurozone etc trades are significant to their trading profile. I might be wrong on this, but why else would such a firm set up in IRL. Oh yes, corporation tax, another good reason why global capital would remain in IRL rather than court the much higher corp taxes in the UK. In short, and with respect, the threat of a flight of global capital really doesn’t seem to stack up.

Desmond, you’re correct, but this would still impact the Funds industry. A UK domiciled fund could buy and sell securities or other contracts from UK banks. It could then sell fund units to say German investors who would have to pay tax on the purchase of fund units. However, the performance of the fund being bought would be better than a fund based in Ireland as the latter would have reduced in value due to taxes on underlying transactions. As a result any fund manager worth their salt would move their funds to the UK.

The tax could work, but if the UK is exempt then individual components of financial services industries elsewhere will be destroyed. The Irish funds industry is just one such example.

They ‘know’ how to spell

Ah shit you got me spelling police , I promise I won’t do it again garda Lanigan

Good min Lardagain. Wot we doo withoot peepel lik yoo

Spend half an hour talking to McGrath and you’ll see what little he knows and what a sack of it, he is. He is viewed as cynical even by FF’ers in Cork.

McGrath is a member of a political
Party that destroyed this country therefore his opinion counts for nothing.

Hi Desmond, UK Stamp Duty on share transactions only applies to to the purchase of UK shares in the UK . If you by foreign shares it doesn’t apply. However, it’s not share trading thats targeted, it’s the foreign exchange market that the promoters of this tax have in sight. London dominates this market with a turnover of $1.7 trillion per day, yes per day. This compares to annual UK GDP of $2.25 trillion.

Forex margins are very low, fractions of a percentage point, so you can see why the British are so concerned.

Yes and no is the answer to that, you are right in the sense that the vast majority of work done in IFSC and numerous other locations around the country is essentially servicing onshore transactions, The Us and the Uk. But it will have an impact on offshore entities based in Ireland and mainland Europe. So it will have some impact, not a huge amount but some.

What about the likes of google, Citi etc who avail of the low corporation tax. Will this new European tax be applicable to their activity. If so then I would worry a bit.

In a way it’s a cute way to get around irelands low Corp tax rate.

There’s more than one way to skin a cat I suppose

@peter 1.7 trillion per day!!!! Really?????? Jesus…

Thanks Peter. Yes I can see why the Uk govt is concerned at the prospect of the FTT being introduced, especially now that they have vacated their seat at the table where the details of the FTT will be agreed. Given that the FTT will apply to trades involving Eurozone/EU23-26 countries that is quite a significant exposure for UK-based forex, etc trades that you have identified. However, and this is where the politics comes in, it is increasingly understood, even by the Right in the EU, that the financial sector has to be made to pay significantly towards the costs of reconstructing Europe. Cameron showed where his interests lay, but he overplayed his hand and has now opened the door to an FTT which will inevitably restructure the City of London.

Cop on Paul, I have heard enough of McGrath to know he is an ill informed idiot. He was part of the government that fucked this country for generations.
Play the ball not the man, what the fuck does that mean? Are you one of the Irish sheep who shrugs their shoulders and says ah well, sure he’s a grand man. I will continue to play the Fianna fail man until I’m cold in the ground. They deserve it.

Please explain why it is good for ireland

The IMF released the results of a study over a year ago stating how FTT wouldn’t have adverse affects on an economy. It’s too late for me to google that for you.

I’m going to pretend that all tax intake goes to worthy places.

What makes you think it’s so bad?

Indeed

We cannot allow a situation where London becomes a more attractive base than Ireland. Is this FF-er for real? London is the second or third biggest global financial hub.

Ciaro, have you met the man or are you always this judgementsl?

I’ve never met the man. Even if he were an exe murderer you judge his utterances on their merit so argue for or against what he said, not who he is

Play the ball, not the man

The people who gave a mandate would probably disagree with you on that one.

Completely separate things. Companies today pay different taxes in different places. You can have a fund manager earning profits in Ireland, but running a fund sitting in the UK and thus avoiding FTT. Unfortunately we’ll be left with the 2 or 3 fund management jobs whilst the UK will get the thousands of administration jobs that follow the fund.