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MICHAEL NOONAN HAS announced that companies registered in Ireland for tax reasons will no longer be allowed to be ‘stateless’ in terms of their residency.
The Minister for Finance’s announcement during today’s Budget speech will close a loophole which has allowed some of the biggest companies in the world to make use of Ireland’s tax laws in a legal way to ensure that they paid lower levels of tax than they otherwise would have done.
Companies had used subsidiary companies which had no fixed country of residence and were considered ‘stateless’ in order to avail of Ireland’s comparatively low corporation tax rate.
The issue came to light when a US Senate committee raised questions about the international tax practices of companies such as Apple and Google earlier this year.
The Government had repeatedly rubbished any suggestion that there had been a sweetheart deal with any big companies to encourage them to set up in Ireland. However today’s move will be seen as an attempt to firm up confidence among the public about the corporation tax paid by large multinational companies.
The Minister for Finance also reaffirmed the Government’s long-held to commitment to not increase the corporation tax rate, despite calls for it to be increased from some commentators.
“We are 100 per cent committed to the 12. 5 per cent corporation tax rate,” he told the Dail chamber. “This will not change”.
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The 12. 5 per cent corporation tax rate will change when our EU partners tell us to change it.
They told us many times already to change it. The government refused.
No, it won’t. Whatever leverage they had to change the corp tax rate will be gone in December when we wave bye bye to their reps.
I don’t think that the 12.5 rate is such a big deal for the EU, I think the stateless companies is much a bigger problem.
Remember when Sarkozy raised the corporation tax issue and many predicted that it would be changed? Well the 12.5% rate has outlasted him.
A hand out to multinationals. It’s corporate welfare.
They can’t make us change it. They have been banging on about a harmonised tax base alright but that’s a different issue (would screw us up just as much, but a different issue all the same)
Noonan’s announcement that the “stateless” loophole would be closed is very welcome and should finally put to bed the mostly unwarranted criticism that Ireland is some sort of tax haven.
At the end of the day, we are one of a number of EU and other countries which compete aggressively for multinational investment (Netherlands and Luxembourg being the two main EU competitors), and it is important that we retain the 12.5% tax rate in order to remain competitive, while being seen to address loopholes that permit tax avoidance devices such as the “double Irish Dutch sandwich” (devices which take account of differences in tax rules in different States, not just in Ireland but also in Netherlands and many other places).
An Alternative to Capitalism (since we cannot legislate morality)
Several decades ago, Margaret Thatcher claimed: “There is no alternative”. She was referring to capitalism. Today, this negative attitude still persists.
I would like to offer an alternative to capitalism for the American people to consider. Please click on the following link. It will take you to my essay titled: “Home of the Brave?” which was published by the Athenaeum Library of Philosophy:
http://evans-experientialism.freewebspace.com/steinsvold.htm
John Steinsvold
Perhaps in time the so-called dark ages will be thought of as including our own.
–Georg C. Lichtenberg
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