The Big Bailout of the Eurozone (Another crisis coming? - Seriously)

[joemamas]

Nobel prize winning economist Prof Joseph Stiglitz says the Irish government is wrong to appeal the EU decision on Apple and its tax obligations.
He described comments by Minister Richard Bruton on RTE's Today with Sean O'Rourke Show, in defence of the government's position, as 'utter balderdash.'
On the same programme Prof Stiglitz said: "the fact is that you were encouraging tax avoidance, you knew it.
"Let's not make any pretence about it, you got a few jobs at the cost of stealing revenues from countries around the world. That's the kind of activity that has to be stopped."
He said that the question now was: "what are the rules of the game about tax competition, about state aid and it's very clear if a company says that they got revenue associated with Ireland, you have to pay a tax on it.
"Whether that income was correctly attributed to Ireland is another matter. If Apple is saying that this is Irish income, you have an obligation to impose taxes on income that they say originated in Ireland.
"Apple is claiming that the income was associated with activities, that's why they said they could book it to an Irish subsidiary. Can they book it to a subsidiary for activities not occurring in Ireland? The issue is, if they book it to Ireland should there be an Irish tax?
"That's what the issue is. They were booking it to an Irish subsidiary and they were not paying taxes."
Prof Stiglitz said he found it mystifying that Ireland didn't "just pocket that €13billion and use it for the enormous hardship that the people of Ireland have had to face.
"The argument that you will lose lots of jobs is absolute nonsense. It's a new world, it's very clear that the rules of the game have changed, under those new rules Ireland will have to compete on the basis of going forward, what it can provide economically.
"I think Ireland can provide a lot - it has a well trained labour force, a disciplined labour force, and that is the basis on which countries should compete, with infrastructure.
"This idea that all these people will leave and their jobs will disappear is a vote of lack of confidence in Ireland. I'd rather have a vote of confidence in Ireland and say, maybe a few people engaged in cheating, relatively few, but nothing to compensate for the loss of the €13billion."

First and foremost, I am a capitalist, I like to see people who invest their time and money into an idea or a business, get a good return. Having said that, it is very difficult to argue with the above.
Seriously, if their total taxable rate was 1% then something smells big time, especially given corporate tax rates elsewhere.

[Hound]

Nobel prize winning economist Prof Joseph Stiglitz says the Irish government is wrong to appeal the EU decision on Apple and its tax obligations.
He described comments by Minister Richard Bruton on RTE's Today with Sean O'Rourke Show, in defence of the government's position, as 'utter balderdash.'
On the same programme Prof Stiglitz said: "the fact is that you were encouraging tax avoidance, you knew it.
"Let's not make any pretence about it, you got a few jobs at the cost of stealing revenues from countries around the world. That's the kind of activity that has to be stopped."
He said that the question now was: "what are the rules of the game about tax competition, about state aid and it's very clear if a company says that they got revenue associated with Ireland, you have to pay a tax on it.
"Whether that income was correctly attributed to Ireland is another matter. If Apple is saying that this is Irish income, you have an obligation to impose taxes on income that they say originated in Ireland.
"Apple is claiming that the income was associated with activities, that's why they said they could book it to an Irish subsidiary. Can they book it to a subsidiary for activities not occurring in Ireland? The issue is, if they book it to Ireland should there be an Irish tax?
"That's what the issue is. They were booking it to an Irish subsidiary and they were not paying taxes."
Prof Stiglitz said he found it mystifying that Ireland didn't "just pocket that €13billion and use it for the enormous hardship that the people of Ireland have had to face.
"The argument that you will lose lots of jobs is absolute nonsense. It's a new world, it's very clear that the rules of the game have changed, under those new rules Ireland will have to compete on the basis of going forward, what it can provide economically.
"I think Ireland can provide a lot - it has a well trained labour force, a disciplined labour force, and that is the basis on which countries should compete, with infrastructure.
"This idea that all these people will leave and their jobs will disappear is a vote of lack of confidence in Ireland. I'd rather have a vote of confidence in Ireland and say, maybe a few people engaged in cheating, relatively few, but nothing to compensate for the loss of the €13billion."

First and foremost, I am a capitalist, I like to see people who invest their time and money into an idea or a business, get a good return. Having said that, it is very difficult to argue with the above.
Seriously, if their total taxable rate was 1% then something smells big time, especially given corporate tax rates elsewhere.

As I said above joe, there is categorically no 1% tax rate.

The problem with "Nobel prize winning economist Prof Joseph Stiglitz" is that he is talking through his arse.

Apple did not book anything through an Irish tax resident subisidiary. The subsidiary was not resident in Ireland. It's like someone saying we give Dermot Desmond a special deal on his taxes because he's resident in Monaco (or wherever it is) and he only pays tax on the small bit of his income that directly relates to Ireland.

Under Irish tax law as it was then, people and companies can choose where they are tax resident, so long as they follow the prescribed rules as outlined in tax legislation. The Apple companies were not Irish resident. 

[Hound]

First and foremost, I am a capitalist, I like to see people who invest their time and money into an idea or a business, get a good return. Having said that, it is very difficult to argue with the above.
Seriously, if their total taxable rate was 1% then something smells big time, especially given corporate tax rates elsewhere.

The other side of the coin is that there is certainly a 0% rate out there in Cayman, Bermuda, etc that many US MNCs use to shelter a large portion of their international profits. But it is US rules that allow them to do that and it doesn't save them any Irish tax.

The famous "double Irish" only worked because of US tax rules. A German, UK, French, Canadian, Australian, etc, etc HQ company could never use the "double Irish". Only the US could use it. 

Most US MNCs are now planning to get out of havens or have already left. There is a new reporting requirement coming in shortly that will require every group to show publicly exactly where there profits are booked - and most are afraid of the bad publicity they will get when a haven is seen having massive profits.

Ironically, it is believed that Apple has already moved their technology and other IP to Ireland, hence the recent unexpected bump in Ireland's corporation tax revenues.

[joemamas]

First and foremost, I am a capitalist, I like to see people who invest their time and money into an idea or a business, get a good return. Having said that, it is very difficult to argue with the above.
Seriously, if their total taxable rate was 1% then something smells big time, especially given corporate tax rates elsewhere.

The other side of the coin is that there is certainly a 0% rate out there in Cayman, Bermuda, etc that many US MNCs use to shelter a large portion of their international profits. But it is US rules that allow them to do that and it doesn't save them any Irish tax.

The famous "double Irish" only worked because of US tax rules. A German, UK, French, Canadian, Australian, etc, etc HQ company could never use the "double Irish". Only the US could use it. 

Most US MNCs are now planning to get out of havens or have already left. There is a new reporting requirement coming in shortly that will require every group to show publicly exactly where there profits are booked - and most are afraid of the bad publicity they will get when a haven is seen having massive profits.

Ironically, it is believed that Apple has already moved their technology and other IP to Ireland, hence the recent unexpected bump in Ireland's corporation tax revenues.

Thank you for the detailed response, just read Q&A on p3 of indo, also pretty detailed

[trileacman]

Nobel prize winning economist Prof Joseph Stiglitz says the Irish government is wrong to appeal the EU decision on Apple and its tax obligations.
"Let's not make any pretence about it, you got a few jobs at the cost of stealing revenues from countries around the world. That's the kind of activity that has to be stopped."

f**k that cnut. We got shafted regularly by the world powers down the years and centuries. Boo hoo if we managed to f**k them out of some tax so we could make some employment in Ireland. They'd rather we were all still exporting potatoes and Aran sweaters and they were taking the cream off the blue chip companies.

Stiglitz doesn't give a rats arse about the Irish people or their financial situation, I'd say he was ravenous to see us get fucked in the bailout negotiations and he only really cares that this deal we had with Apple is f**king the yanks out of some taxes.

[armaghniac]

The point here is that when Ireland sought to attract multinationals, it recognised that the Irish part would be only one component of a global supply chain. So it had a simple proposition, come here and we will charge you 12.5% on your activities in Ireland and we will not make life difficult for you by also trying to charge you for stuff not in Ireland. Basically the value of Apple should be taxed in the US where they attribute most of the value to the design of their kit. The US is providing "state aid" to its multinationals by turning a blind eye when the profits somehow end up in the Caymans and never make it back to the US.

If Ireland was letting Ryanair be based in Ireland, while allowing their profits to all end up in the Bahamas, then we would be at fault. In this case it is largely the US that has been at fault.

With recent work in the OECD, this kind of thing is diminishing now. I am very suspect of this backdating.

[seafoid]

Nobel prize winning economist Prof Joseph Stiglitz says the Irish government is wrong to appeal the EU decision on Apple and its tax obligations.
"Let's not make any pretence about it, you got a few jobs at the cost of stealing revenues from countries around the world. That's the kind of activity that has to be stopped."

f**k that cnut. We got shafted regularly by the world powers down the years and centuries. Boo hoo if we managed to f**k them out of some tax so we could make some employment in Ireland. They'd rather we were all still exporting potatoes and Aran sweaters and they were taking the cream off the blue chip companies.

Stiglitz doesn't give a rats arse about the Irish people or their financial situation, I'd say he was ravenous to see us get fucked in the bailout negotiations and he only really cares that this deal we had with Apple is f**king the yanks out of some taxes.

Surely the people would like 13bn
Ireland is a tech cluster. If Apple left (and they probably won't) there would still be serious demand for the workforce

[TabClear]

Nobel prize winning economist Prof Joseph Stiglitz says the Irish government is wrong to appeal the EU decision on Apple and its tax obligations.
"Let's not make any pretence about it, you got a few jobs at the cost of stealing revenues from countries around the world. That's the kind of activity that has to be stopped."

f**k that cnut. We got shafted regularly by the world powers down the years and centuries. Boo hoo if we managed to f**k them out of some tax so we could make some employment in Ireland. They'd rather we were all still exporting potatoes and Aran sweaters and they were taking the cream off the blue chip companies.

Stiglitz doesn't give a rats arse about the Irish people or their financial situation, I'd say he was ravenous to see us get fucked in the bailout negotiations and he only really cares that this deal we had with Apple is f**king the yanks out of some taxes.

Surely the people would like 13bn
Ireland is a tech cluster. If Apple left (and they probably won't) there would still be serious demand for the workforce

Possibly. But the danger is that other tech giants and pharmaceutical companies start to view irish investment as riskier and more expensive when evaluating investment appraisals.

[magpie seanie]

The problem with this case is so many people have not even got the most basic understanding of tax law. The old adage of "if it seems to good to be true it probably is" applies here.

I read a quote that sum up the situation perfectly - "Not to appeal the case would imply acceptance of a loss of sovereignty"

The famed billions are not due to Ireland under tax law. The EU is acting beyond its powers and will lose this appeal (which I think they know). It's typical bully boy tactics and designed to embarrass Ireland and force changes to our CT regime including a rate reduction. I'm amazed but delighted that it look like FG and FF are standing up to them on this. I'm equally disappointed at the short-sightedness and stupidity of SF, SD's, PBP and others in opposing an appeal. This is a red line issue regarding our sovereignty. We haven't a lot left but setting our tax law is one. We simply cannot concede this.

As I understand it this "loophole" regarding stateless companies has now been closed so no longer applies. The 1% argument is a total red herring.

[TabClear]

The problem with this case is so many people have not even got the most basic understanding of tax law. The old adage of "if it seems to good to be true it probably is" applies here.

I read a quote that sum up the situation perfectly - "Not to appeal the case would imply acceptance of a loss of sovereignty"

The famed billions are not due to Ireland under tax law. The EU is acting beyond its powers and will lose this appeal (which I think they know). It's typical bully boy tactics and designed to embarrass Ireland and force changes to our CT regime including a rate reduction. I'm amazed but delighted that it look like FG and FF are standing up to them on this. I'm equally disappointed at the short-sightedness and stupidity of SF, SD's, PBP and others in opposing an appeal. This is a red line issue regarding our sovereignty. We haven't a lot left but setting our tax law is one. We simply cannot concede this.

As I understand it this "loophole" regarding stateless companies has now been closed so no longer applies. The 1% argument is a total red herring.

Spot on. Britain had monetary policy options around interest rates and quantitative easing.  You can argue how successful these are but they are there.  If ROI cannot set tax rates there is very little left in the arsenal not controlled from Europe.

[Canalman]

Maybe I am reading this wrong, but I think the Commission's argument is not about our low tax rate but that Apple got a particular "sweetheart deal" above and beyond our low CT rate.
That is its gripe I think  in that it was according to them a not allowed state aid .

By the way, every other country in the EU is at this state aid mallarkey, but when you,  as Ireland is,  severely weakened in owing alot of money, the sharks will pounce.

[theskull1]

Yes what they've been doing doesnt pass the smell test. The very least Ireland can do is highlight that similar arrangements are in place in other member states.

[Declan]

Maybe I am reading this wrong, but I think the Commission's argument is not about our low tax rate but that Apple got a particular "sweetheart deal" above and beyond our low CT rate. 

That's my reading of it as well

[Jim_Murphy_74]

The famed billions are not due to Ireland under tax law

Very relevant.  We have the EU commission now either unilaterally changing our laws or else questioning how our state agencies implemented them.

Dangerous stuff.  Even if we accept this taking of our sovereignty

Whatever about AAA/PBP mob, it is beyond me that Shinners are not at least acknowledging this issue.

/Jim.

[ashman]

The famed billions are not due to Ireland under tax law

Very relevant.  We have the EU commission now either unilaterally changing our laws or else questioning how our state agencies implemented them.

Dangerous stuff.  Even if we accept this taking of our sovereignty

Whatever about AAA/PBP mob, it is beyond me that Shinners are not at least acknowledging this issue.

/Jim.

The Shinners see this as a chance to attack FF after losing ground to them in last year.  That said if they were in power they would be doing no different to FG and FF.  This could bite them badly yet as they could well be in govt in 26 Cos much quicker than you think.