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NEW PROPOSALS ON the taxation of the digital economy would “fundamentally” affect large multinationals based in Ireland, Chartered Accountants Ireland said today.
The Organisation for Economic Co-operation and Development (OECD) yesterday released a discussion document on “addressing the tax challenges of the digital economy”. In it, several options for dealing with what is seen as large scale tax avoidance areoutlined.
The report by the Paris-based body pegs Ireland as the second largest exporter of ICT services, behind India but outstripping the United States, Germany, the United Kingdom and China.
One option outlined for levelling a more effective tax burden on multinationals offering “fully dematerialised digital activities” involves determining establishment of a company for tax purposes if it maintains a “significant digital presence” in a country’s economy.
This would include having a significant customer base or retaining data from customers located in a particular jurisdiction.
In effect, this could result in Britain or France targeting a digital company which has offices in Ireland if a significant amount of users are British or French.
Proposal could hobble Irish system
The CAI blasted this proposal, saying that it “would be akin to taxing our agriculture products where they are sold, rather than where they are grown”.
CAI tax director Brian Keegan said:
These proposals, which are a key element of a larger project to revise the way multinational companies are taxed, would fundamentally change the business model for companies based in Ireland.(They) would move company profits away from where value is created, in countries like Ireland, to locations where products are sold-principally the major European countries
The CAI said that due to its position as a major exporter of information and communication technologies, Ireland “could be the biggest loser” in terms of our corporation tax rate.
Ireland’s low corporation tax rate of 12.5 per cent has often been in the crosshairs of larger European countries.
Keegan urged Irish businesses to engage with the OECD paper, which is open for public consultation until the 14 April. He said: “We need the commercial point of view to be fed into these proposals before they become concrete to the detriment of Irish business and Irish taxpayers generally.”
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If this happens ireland will be screwed .We have all our eggs in one basket and the big countries are going to rob these eggs. Ireland Inc could be in a far worse place than with the banks of this happens.
Its just a discussion paper.
It probably won’t come to anything anyway.
That won’t happen, it’ll mean a reduced profit for these companies and they must pay their fair share of taxes. They should be boycotted, If they threaten to pull? But they won’t, they’ll moan and groan though!
many people moving to Stripe from paypal. i dont like how they cream ebay/paypal users twice and charge way more for exchange rates than your own bank. make all foreign payments from visa if going through paypal to avoid this.
no loss.
Would Ireland be screwed though? If they are taxed where the user is based then there is no benefit to them moving headquarters, they will still be taxed the same.
Ryanair does most of its business outside of Ireland. It’s based in Ireland just like all these Multi nationals that have European HQ based in Dublin/Ireland.
A discussion paper? Like the Common Market?
Stripe is the business!
God forbid Apple or Google get asked to pay tax… Disgraceful what…! Tax is for the Irish idiots who clock in every morning for a days wage. Do Europe not know this!
If this goes ahead and these companies pull out if Ireland, a large chunk of those people won’t be clicking in anymore
Clocking
These lads are going nowhere no matter what, fact. Sure don’t they operate in a country that protects the rich man at all costs including going to war on the poor in the streets rather than ask a multinational corporation to put their hands into their pocket. There should be a standard corporation tax across Europe. Not a come build here, pay nothing and get filthy rich attitude while we run the country on the broken back of the worker and laugh at him instead.
Naill, it doesn’t excuse not paying tax
If Animal says fact then its fact, fact!!
Yes they would move to a country with cheaper labour costs. Why would they stay here?
God forbid that we should ever stop relying on FDI from abroad and make an effort to provide jobs and employment ourselves,but that would require hard work commitment and effort, not to mention a positive outlook,perish the thought.
a large chunk of irish people?
The golden goose is about to croak.
You blew the money on rubbish like overseas aid and overpaying yerselves instead of investing in capital infrastructure.
FDI bubble is about to pop.
The FDI ‘bubble’ is not about to ‘pop’. If anything it has been growing over the past 2 years and goes from stength to strength. That sector has been extremely important in the absence of a domestic recovery where deflation is dragging on the economy.
Bad news for Ireland. This targets mainly the larger tech companies but it may be start of a slippery slope where Ireland’s corporation tax rate is ultimately targeted. This needs to be tackled head-on and the govt should engage with all the corporates over the OECD paper and have a strategy to counter it.
It’s about time we stood up to these tax dodgers. Ireland built its tax foundations on sand. It may be difficult but better in the long run
In long run the race to bottom b stopped by a harmonized tax rate because that’s what the big European countries want. Eventually a lot of these companies will end up going back to the US where corporations basically owns the politicians too much bigger degree done in Europe far far more. They are already talking about would you sing the taxes for corporations drastically over there including the Democrats which means that this strategy that we’ve been relying on is not going to work for very much longer so we need to find a better niche in the global market. We are making no real attempt to do this perform the odd photo op a trip to China.
We’re just sitting here and are splendid cocoon years later after everybody has already learned a trick for themselves still thinking we’re special we’re not
In the meantime we are struggling or domestic businesses with taxes and stupid regulations was taking more and more consumer spending other peoples pockets what at the same time making college list affordable and harder to get into on to compound the problem or training options for employees do not include serious courses in series institutions they are Mickey Mouse certs in customer service and at all that’s kind of nonsense fas was made for a completely different error and it has no place here they can change the name to entry to intero all they want its still the same crap
God dammit not using Google speak anymore u say one thing it came comes up with another on screen. :(
French think tank… Enough said
Why would the Irish tax the multinationals when they can tax the poor instead?
Because we are tax laundrette..the govt look stupid saying were not then opposing something in a way that proves profits not made here are funneled here for tax laundering.
I’m not dim enough to think jack in our rate to 50 percent would work either but we’ve been relying on this one trick pony for too long. Gal moving to Poland should have made us realize that. Any fool can lower the taxes we need to carve a better niche and we need to overhaul how we regulate n tax smes we have the absurd situation wear thanks are under regulated local shops are over regulated we need to flip that around. Rates need to b replaced with taking a percentage of your profits that it is fair taxation telling them to give you a block of money whether they have it or not is ridiculous.
There loads of stupid regs designed to give CCS fines money like what kind of stickers u put in windows. We also need education reform (that includes labor keep in its fees promises) so our best don’t go to UK or us units ( many of them I saying that if they have to pay fees anyway they may as well go to a globally reputable university I’d even do limited free postcard education for those who guess the top 20 percent of grades who are below a means test threshold.
*banks
I dont think you can compare agriculture to software. Ireland doesnt create the value for these IT companies , but more of a distribution, localisation etc. The IPR is “created” in the States or wherever and fictionally “moved” here using nothing more than a keyboard and some legal papers. Countries like the US should be dropping corporate taxes not pushing their own companies offshore and then whining about it.
Make hay while the sun shines.
By the time the rug gets pulled and all the multinationals abandon Ireland, Sinn Fein will be in Government and we can more legitimately become a very wealthy country under their Economic Plan.
it will be great, so it will, we’ll all be earning 5 euros an hour knitting Aran sweaters and growing and picking cabbage.
When it comes to big corporation they will find a way /loophole to help reduce the amount off tax they pay. More than likely easy way round proposal would be for the corporations to sell goods/ services to solely a middle man / another company in Ireland at effective same price as they normally sell the goods then the middle would resell the product/ service with little to no markup.
Thereby corporation is making full profit in Ireland and middleman is making virtually little to no profit in other county when it resells goods service
Ireland needs to change its tax laws!
If our tax rate was 12.5 per cent of declared profits per Financial Accounts all would be well but sadly some Companies only pay 2per .cent!
Not acceptable internationally!
Time for change!
Time fir reality!
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