Is Ireland about to become a fully-fledged tax haven?

Ard-Taoiseach wrote:

Slim Buddha wrote:

If we assume that the tax haven status brings in companies for their own tax avoidence reasons to save on tax in their original domicilary, we would need a large number of such companies coming here to pay for proper public services. But if we pare public services to the minimum and privatise everything that can withstand privatisation, then maybe we don't need so many after all. I hope this is not what you are driving at, Ard.

I know a lot of brass plate operations come with tax haven status, but we do have very real industries in areas like banking, pharmaceuticals, electronic engineering, medical devices and so on. Corporation taxes are only a medium-sized source of government revenue anyway. PAYE and VAT are much more important tax headings.

We have a plague of brass-plate stuff here too (or Briefkastenfirmen, as they are known). I agree we need a competitive and attractive corporation tax but we should look upon it as cream on the cake and never as part of the cake itself. We must never be dependent on something that another government can negate with legislation of its own.

We really need to concentrate on learning from the incompetence and maladministration of the last decade. Sanity must be brought to the property market so that the lunacy in this sector does not take off again when we come out the other end of this downturn, however long it may last. That means regulation to prevent this sector becoming 25% of our economy again.

If we can sort out the property market, we can then turn to using the money we would have otherwise pissed away on property to good effect by building up a first class venture capital structure and support the formation and development of indigineous industry. If we don't, we will always rely on brass plate outfits, looking for crumbs.

Slim Buddha wrote:

Ard-Taoiseach wrote:

Slim Buddha wrote:

If we assume that the tax haven status brings in companies for their own tax avoidence reasons to save on tax in their original domicilary, we would need a large number of such companies coming here to pay for proper public services. But if we pare public services to the minimum and privatise everything that can withstand privatisation, then maybe we don't need so many after all. I hope this is not what you are driving at, Ard.

I know a lot of brass plate operations come with tax haven status, but we do have very real industries in areas like banking, pharmaceuticals, electronic engineering, medical devices and so on. Corporation taxes are only a medium-sized source of government revenue anyway. PAYE and VAT are much more important tax headings.

We have a plague of brass-plate stuff here too (or Briefkastenfirmen, as they are known). I agree we need a competitive and attractive corporation tax but we should look upon it as cream on the cake and never as part of the cake itself. We must never be dependent on something that another government can negate with legislation of its own.

We really need to concentrate on learning from the incompetence and maladministration of the last decade. Sanity must be brought to the property market so that the lunacy in this sector does not take off again when we come out the other end of this downturn, however long it may last. That means regulation to prevent this sector becoming 25% of our economy again.

If we can sort out the property market, we can then turn to using the money we would have otherwise pissed away on property to good effect by building up a first class venture capital structure and support the formation and development of indigineous industry. If we don't, we will always rely on brass plate outfits, looking for crumbs.

I agree with this, and would add that along with this we should follow Denmark and the other countries who are becoming energy independent mainly through renewables. Energy costs are increasingly going to become critical to national economies. We should also stop building all over our best agricultural land and support local, rather than industrialised farming and the state should renationalise the telecommunications land line system and introduce high speed broad band across the whole country.

There is every indication that the US is going to come down hard and heavy on the Ireland-based brass plates and is starting an enquiry into them. They will either change their tax laws, or else use the power they have over the Irish economy in some unsavoury way.

Fair points Slim Buddha and cactus. Is it so important that we have such low tax rather than sustainable business? It's hard to know where the Irish genius lies to attain and sustain that long-term business and economy but I'd guess it's largely back to farming and basics. That could include local industry based on farming and more variety of farming and eco-tourism.

Strangely there's some resistance to farmer's markets in Ennis but not in other parts of the county here in Clare. Some smaller towns have very successful and enjoyable markets (must takes some photos and add them to TheBear's thread on local markets) but the farmers in Ennis are getting treated with a bit of disdain. The council is reluctant to clear the car park where they set up their Friday morning stalls and the farmers themselves say that getting funding or grants is blood out of turnip territory.

Anyway, getting our infrastructure in order is an obsession of mine - we are always going to have ongoing overheads in this economy and it's best in my view if we took advantage of what we naturally have to sustain that demand. This means electricity and water as well as, surely, skilled local labour ...

The strength of the euro against sterling and the dollar is a nasty business for Ireland. Along with rising costs it must be eating away at the rationale for any US firm staying here.

Slim Buddha wrote:

Ard-Taoiseach wrote:

Slim Buddha wrote:

If we assume that the tax haven status brings in companies for their own tax avoidence reasons to save on tax in their original domicilary, we would need a large number of such companies coming here to pay for proper public services. But if we pare public services to the minimum and privatise everything that can withstand privatisation, then maybe we don't need so many after all. I hope this is not what you are driving at, Ard.

I know a lot of brass plate operations come with tax haven status, but we do have very real industries in areas like banking, pharmaceuticals, electronic engineering, medical devices and so on. Corporation taxes are only a medium-sized source of government revenue anyway. PAYE and VAT are much more important tax headings.

We have a plague of brass-plate stuff here too (or Briefkastenfirmen, as they are known). I agree we need a competitive and attractive corporation tax but we should look upon it as cream on the cake and never as part of the cake itself. We must never be dependent on something that another government can negate with legislation of its own.

I agree and our government is doing that through investment in infrastructure, the SFI, Enterprise Ireland, the education sector and building clusters of firms here.

Quote :

We really need to concentrate on learning from the incompetence and maladministration of the last decade. Sanity must be brought to the property market so that the lunacy in this sector does not take off again when we come out the other end of this downturn, however long it may last. That means regulation to prevent this sector becoming 25% of our economy again.

Slim Buddha, building did not account for 25% of the Irish economy. It accounted for, at most, 11% of the output of Ireland's economy. The building sector never achieved the heights of 25% of national output as the CSO never recorded this. We don't need regulations to head off property exuberance, we just need to phase out superfluous tax breaks for property developments. If the incentives relating to property were phased out in 2003/04, we would've had a much more disciplined property market. Regulation adds to the cost of doing business and slows things down. If we instead reduce the attractiveness of the sector through cutting fiscal incentives.

Quote :

If we can sort out the property market, we can then turn to using the money we would have otherwise pissed away on property to good effect by building up a first class venture capital structure and support the formation and development of indigineous industry. If we don't, we will always rely on brass plate outfits, looking for crumbs.

We aren't reliant on brass plate operations and never have been. Google, Pfizer, Dell, Intel, Hewlett Packard, Bristol Meyer Squibb, Guidant, Wyeth, State Street and so on all have real and verifiable operations in this country. They produce, they export, they are real companies with real employees making real profits and a real contribution to the Irish economy. Very little of the multinational sector is brass plating. Sandisk is the only example of which I can think.

Someone mentioned to me that our local city centre car wash, that charges about 60 euro to wash a car, and packed for days in advance until recently, has been virtually empty for the last couple of weeks.

I'm not sure how the CSO categorise construction. For starters I think they don't count firms of under 5 persons. Most skilled builders are "self-employed" individuals, are they counted?
Many firms are less than five persons. Does construction count the bathroom and kitchen suppliers and fitters? Carpet fitters?
Auctioneers and estate agents?

Our local newspaper, 100 years publishing, is on its knees. In the construction boom two free papers set up on the back of property sales-related advertising and the market and with the advertising gone, the newspaper is not making anything. It was bought up a couple of years ago for crazy money by a big Scottish group who will ditch it rather than try to ride out the slump.

The Davy report from 2005 points out that construction-related workers have had high disposable incomes: all this funny money is gone as though a plug has been pulled.

14% of the labour force was in construction work. The spin off from this in directly construction-related business (legal, advertising, fit out, sales, landscaping, builders providers, freight) and indirectly - the wages earned in construction being spent in the wider economy - would seem to me to inevitably be coming to a standstill.

All of the 'outsider' estimates are going to be wrong. Most builders have stopped and are just putting doors and windows in. People have sacked three quarters of their staff. Some have gone under and a lot more will go under soon.

The local authorities and Revenue takings are going to be hit for six, and unemployment costs will be way up.

Its likely that GNP will be hit over 6%.


http://www.davydirect.ie/other/pubarticles/construction20050524.pdf

http://www.independent.ie/business/irish/housing-crux-will-put-gnp-under-threat-1047224.html

http://www.independent.ie/business/irish/history-suggests-landing-will-not-be-soft-1081403.html

cactus flower wrote:

Someone mentioned to me that our local city centre car wash, that charges about 60 euro to wash a car, and packed for days in advance until recently, has been virtually empty for the last couple of weeks.

I'm not sure how the CSO categorise construction. For starters I think they don't count firms of under 5 persons. Most skilled builders are "self-employed" individuals, are they counted?
Many firms are less than five persons. Does construction count the bathroom and kitchen suppliers and fitters? Carpet fitters?
Auctioneers and estate agents?

Our local newspaper, 100 years publishing, is on its knees. In the construction boom two free papers set up on the back of property sales-related advertising and the market and with the advertising gone, the newspaper is not making anything. It was bought up a couple of years ago for crazy money by a big Scottish group who will ditch it rather than try to ride out the slump.

The Davy report from 2005 points out that construction-related workers have had high disposable incomes: all this funny money is gone as though a plug has been pulled.

14% of the labour force was in construction work. The spin off from this in directly construction-related business (legal, advertising, fit out, sales, landscaping, builders providers, freight) and indirectly - the wages earned in construction being spent in the wider economy - would seem to me to inevitably be coming to a standstill.

All of the 'outsider' estimates are going to be wrong. Most builders have stopped and are just putting doors and windows in. People have sacked three quarters of their staff. Some have gone under and a lot more will go under soon.

The local authorities and Revenue takings are going to be hit for six, and unemployment costs will be way up.

Its likely that GNP will be hit over 6%.


http://www.davydirect.ie/other/pubarticles/construction20050524.pdf

http://www.independent.ie/business/irish/housing-crux-will-put-gnp-under-threat-1047224.html

http://www.independent.ie/business/irish/history-suggests-landing-will-not-be-soft-1081403.html

It really annoys me that the Council didn't get the sewerage system rigged out while the boom was on. Is it too late now I wonder? The boom would have gone on for at least another half a billion here in Ennis/Clare if we had sorted our shit out.

I'd love to know if the money was there to do this job - a system will go in costing 7 million or something but I don't think it will cover it all - and I wonder if the money which was there and taken in was spent in useful ways making it unavoidable that a vital piece of infrastructure (the sewerage system) could not be upgraded.

It's unbelievable that FiannafailLand down here would shoot themselves in the foot like that, unless there was a genuine reason with the river going bust or something.

In my experience, the money was there in the 2000s to do these jobs, but there is no incentive for local authority engineers to push schemes along. They get paid just as much if they don't bother. Plus, the post of County Engineer was abolished under the local authority reforms. This meant there was nobody who took a strategic and accountable view of what needed to be done. Major roads projects were driven along by the NRA, but sanitary services were left in the hands of hobbled and disfunctional local authorities.

cactus flower wrote:

In my experience, the money was there in the 2000s to do these jobs, but there is no incentive for local authority engineers to push schemes along. They get paid just as much if they don't bother. Plus, the post of County Engineer was abolished under the local authority reforms. This meant there was nobody who took a strategic and accountable view of what needed to be done. Major roads projects were driven along by the NRA, but sanitary services were left in the hands of hobbled and disfunctional local authorities.

What's this stuff about local authority reforms and all that? I won't deny I haven't a picture of who's in charge of what but you'd imagine that there should be someone out there who is responsible for public services to that degree? There must be some planners there who say "we've got a certain amount of land zonable for business and a certain amount of businesses wanting to build on that land but we only have room enough in our pipes for X shit so we'll have to make our pipes X + n wide to take all the new crap coming down the tubes or else we go down the tubes."

[quote="Ard-Taoiseach"][quote="Slim Buddha"][quote="Ard-Taoiseach"][quote="Slim Buddha"]


Slim Buddha, building did not account for 25% of the Irish economy. It accounted for, at most, 11% of the output of Ireland's economy. The building sector never achieved the heights of 25% of national output as the CSO never recorded this. We don't need regulations to head off property exuberance, we just need to phase out superfluous tax breaks for property developments. If the incentives relating to property were phased out in 2003/04, we would've had a much more disciplined property market. Regulation adds to the cost of doing business and slows things down. If we instead reduce the attractiveness of the sector through cutting fiscal incentives.

It accounted for more than 11% in real terms at its height. The official figure and the actual figure in this industry are usually quite a distance away from each other due to the cash in hand nature of this business lending itself to much "off-book" activity occurring which, of course, the CSO, and indeed, the Revenue, never hear about. The construction industry is the Achilles Heel of our economy and needs to be kept in check. An elimination of all tax breaks and an insistence on part payment of the infrastructural costs to be borne by builders is necessary if regulation is to be eschewed. Planning in ireland needs rooot and branch reform and the flaws in the legislation allowing councillors overrule decisions made by county engineers and planners must be eliminated.

[quote="Slim Buddha"][quote="Ard-Taoiseach"][quote="Slim Buddha"][quote="Ard-Taoiseach"]

Slim Buddha wrote:

Slim Buddha, building did not account for 25% of the Irish economy. It accounted for, at most, 11% of the output of Ireland's economy. The building sector never achieved the heights of 25% of national output as the CSO never recorded this. We don't need regulations to head off property exuberance, we just need to phase out superfluous tax breaks for property developments. If the incentives relating to property were phased out in 2003/04, we would've had a much more disciplined property market. Regulation adds to the cost of doing business and slows things down. If we instead reduce the attractiveness of the sector through cutting fiscal incentives.

It accounted for more than 11% in real terms at its height. The official figure and the actual figure in this industry are usually quite a distance away from each other due to the cash in hand nature of this business lending itself to much "off-book" activity occurring which, of course, the CSO, and indeed, the Revenue, never hear about. The construction industry is the Achilles Heel of our economy and needs to be kept in check. An elimination of all tax breaks and an insistence on part payment of the infrastructural costs to be borne by builders is necessary if regulation is to be eschewed. Planning in ireland needs rooot and branch reform and the flaws in the legislation allowing councillors overrule decisions made by county engineers and planners must be eliminated.

What I would like to know is how much of the tax take was coming from construction related earnings, levies, contributions and so on up to last year. Depending on how you calculate it, between 25% and 50% of the price of each house was going to government. This is not including income tax paid by construction workers. With say 50,000 houses built at average €300,000.00 per house, that would give you €3,750,000,000.00 - €7,500,000,000.00. I wonder have I got this wrong? But whatever, this source of revenue is grinding to a dead stop.

The heat is on for tax havens, with the pre-G20 meeting in Berlin having agreed to home in on this issue in April. The bigger states are gunning for the tax revenue they see bleeding out to various islands with tax regimes that are far, far too attractive:

http://www.guardian.co.uk/business/2009/feb/10/ireland-tax-gap-staff-levels

Quote :

Low-tax, low-cost flight to Dublin

A number of big firms say they have emigrated to Ireland to escape Britain's tax net. But the staffing levels at some relocated companies raise questions

The Guardian, Tuesday 10 February 2009

The bright lights of Dublin and a more accommodating tax regime have encouraged a number of companies to shift their headquarters across the Irish Sea.

The latest ploy by big businesses anxious to avoid UK tax, is to claim that they have changed residence to low-tax Ireland. But when the Guardian went in search of new company headquarters on the Liffey, we found there sometimes seemed to be a touch of blarney involved in the claims...

The Irish Daily Mail's front page carries a report on tax proposals from Obama that they say would hit FDI tax take in Ireland very hard.

I don't think this is available on line. Has anyone seen it. Is this the Daily Mail trying to sink us without a trace? or is it a bona fide report? Or perhaps both?

Obama Seeks $1 Trillion Tax Increase in Budget Plan - Bloomberg

If Obama is going to levy large corporations in order to get a trillion, doesn't it stand to reason that the ones overseas will feel it also ?

Auditor #9 wrote:

Obama Seeks $1 Trillion Tax Increase in Budget Plan - Bloomberg

If Obama is going to levy large corporations in order to get a trillion, doesn't it stand to reason that the ones overseas will feel it also ?

This must be it:

Quote :

Corporate Tax Increase

Obama proposed $353.5 billion in higher taxes on corporations over the next decade, the bulk of which would come from “reforming” rules that allow U.S.-based multinational corporations such as General Electric Co. to defer U.S. tax on profits they earn overseas. GE has about $75 billion offshore on which it has never paid U.S. taxes, according to its regulatory filings.