Friday, October 4, 2013

4/10/2013: 'Tax Haven' Ireland Is Trending in the Media


So more news flow on the 'tax haven' front for Ireland:

Finfacts: Google booked 41% of global revenues in Ireland in 2012; A leprechaun's gold? http://www.finfacts.ie/irishfinancenews/article_1026612.shtml and http://www.tax-news.com/news/Googles_Irish_Tax_Payments_Revealed____62232.html

Give it a thought… mind boggling accounting - more from Finfacts: http://www.finfacts.ie/irishfinancenews/article_1026577.shtml US company profits per Irish employee at $970,000; Tax paid in Ireland at $25,000

And Adobe was dragged out of the shadows to face questions about its... Irish tax exposures: http://www.ft.com/intl/cms/s/0/6273646e-fb77-11e2-8650-00144feabdc0.html#axzz2gmUQNTzk

Irish Times covering 'confusion' over Irish effective tax rates: http://www.finfacts.ie/irishfinancenews/article_1026602.shtml
Ahem… really? Confusion?..

If there is 'confusion' then why is it that we insist on 'no apology' for running beggar-thy-neighbour tax arbitrage? http://www.finfacts.ie/irishfinancenews/article_1026639.shtml

More from Finfacts: http://www.finfacts.ie/irishfinancenews/article_1026038.shtml - you have to love the picture… homo intellectualis gathered in thought…

But apparently, there is no Irish-styled 'confusion' in another corporate tax haven camp: http://www.ft.com/intl/cms/s/0/1560d626-16bf-11e3-bced-00144feabdc0.html?siteedition=intl&siteedition=intl#axzz2eN4xmAsd

Of course, our 'confusion' is single-sided: Minister Noonan is pretty certain that our gains in services exports in 2012, reported recently by CSO are all organic growth: http://www.finance.gov.ie/viewdoc.asp?DocID=7567 So convinced is our Minister of being right on that point, he is unwilling to follow the Dutch in even considering a review of what has been going on: http://www.tax-news.com/news/No_Minimum_Effective_Corporate_Tax_Rate_For_Ireland____62205.html. Now, I actually would agree that setting such a rate might be silly or not enforceable or not even desirable for Ireland, but that does not mean we should be arrogant about the issue of corporate taxation practices.

Brilliant stuff.

To remind you, my view on tax arbitrage (I equate it with being a 'tax haven' in spirit as it is a purposeful attempt to game the system of international taxation to one's advantage) is that not only it undermines our ethical position vis-a-vis our competitors and partners in business, investment and development, but it corrupts our internal economy by showing that gaming the system pays much more than actually attempting to produce something of real market value. It also crowds out resources from productive entrepreneurship and firms.

Let me quote from Finfacts post (http://www.finfacts.ie/irishfinancenews/article_1026577.shtml): "Prof Frank Barry of Trinity College in a recent paper, says that as far back as 1987, T.K. Whitaker said that he would like to see “a restoration of the old (civil service) principle that you were independent of ministers. You gave your views on any new proposals fearlessly, critically, honestly. You did not care whether your views were likely to commend themselves to the minister, whether for their own sake or politically. Once a decision was taken by minister or government, however, you carried it out as loyally and efficiently as you could. That was my understanding of the function of senior civil servants but I’m afraid it has been undermined."

When was the last time that a public enterprise chief said anything of consequence in public that was a departure from the official spin line?"

Indeed I can agree with much of what Professor Barry said recently in arguing that Ireland is not a tax haven (http://www.taxationinfonews.com/2013/09/ireland-is-not-a-tax-haven/). However, our reliance on tax arbitrage is undeniable and it fuels the green jersying agenda of opposing any expression of real (as opposed to token) criticism is seen as an undesirable activity. The result? Look around yourselves - we no longer can live the truth as our GDP, GNP, Exports, Imports, Current Account, PMIs, etc statistics become increasingly invalidated by the tax arbitrage activities of the growing number of global MNCs.

In a typically anodyne fashion, Irish Times posted a debate on the topic: http://www.irishtimes.com/business/economy/can-we-change-our-corporate-tax-rate-1.1542608

Culmination of this circus is: we have Bono - tax resident outside Ireland - claiming that there is nothing wrong with Irish corporate tax policies: http://www.irishtimes.com/business/economy/bono-defends-ireland-s-corporation-tax-1.1538793

But good news for Apple - it was cleared by SEC on technical concerns about its disclosures in relation to foreign tax regime risks: http://www.latimes.com/business/technology/la-fi-tn-apple-reveals-sec-review-of-irish-tax-disclosures-20131003,0,7138891.story

Note: you can track my other posts on the topic from here: http://trueeconomics.blogspot.ie/2013/10/2102013-low-tax-free-market-economy.html

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