Tuesday, July 16, 2024
HomeTop NewsIreland in G7 Views: (Tax) Paradise awaits

Ireland in G7 Views: (Tax) Paradise awaits

Published on

Ireland in G7 Views: (tax) Paradise awaits | Wealth



Lorenzo Magnani

The 15% global tax on multinational companies approved by the G7 on Monday would deprive Ireland of its status as a “tax haven”. For other countries, however, everything has to be achieved

Quartz, a financial and financial information site, has stockpiled how global taxation will affect Ireland, with multinational companies moving their registered offices to pay lower taxes in recent years.

In 2015, out of $ 616 billion in corporate profits, $ 106 billion flowed into Ireland in 2015.

Thanks to the new tax, the OECD estimates that countries could raise at least $ 50-80 billion in tax revenue annually.

Heaven can wait, someone might say. The film is not about the paradise of the Beatty-Henry couple in the 1970s, but about tax-free places. Last Saturday, the G7 announced an agreement to raise the global minimum tax for businesses to 15%. The goal is to eliminate the tax evasion that makes the world’s largest multinational corporations move their headquarters to countries with lower taxes. The proposal, promoted by Joe Biden, should be considered at a meeting scheduled for next July in Venice. Leading Ireland is likely to be strongly opposed by some countries.

See also  Can avenue sellers save China from a work disaster? Beijing seems divided

Ireland: The largest tax haven in the world

The opposite would be strange. In fact, some consider Ireland to be the largest tax haven in the world. Among them was Gabriel Sukman, the economist who discovered it Of the $ 616 billion in corporate profits in 2015, $ 106 billion flowed into the Emerald Islands. The reason for the interest of multinational companies in Ireland is simple. In fact, only 12.5% ​​of corporate profits have flowed into the Irish treasury since the 1990s., The lowest rate in other developed economies, with the aim of encouraging multinational companies to invest in the country. Added to this are several tax systems that allow businesses Completely avoid paying corporation taxes by rebuilding their profits to zero-tax areas like Bermuda.

Many manufacturers, such as Pfizer, take advantage of the Irish tax system, but most prominent companies are in the technology sector. I do not know.By 2020, Microsoft’s Irish subsidiary will make $ 315 billion in profits, Handing them over to a company resident in Bermuda, so It does not pay a single euro in taxes. With the same clause as “Double Irish setting“Google moved $ 75 billion in profits from Ireland in 2019. The clause was lifted last year under pressure from the European Union, but similar incentives still exist. In this way, companies can collectively escape. The United States will receive about $ 500 billion in revenue in a decade If companies do not move their registered office to other countries.

Impact of global tax on Ireland

The G7 financial plan stands on two pillars that make it possible to recover a portion of these evasion taxes. The first gives it A country can tax a multinational company if the profit of the multinational company is from its residents, When the company could not claim that the profit was actually made in another country. For example, the second step ensures that even if a UK company records its profits in Ireland and pays a corporate tax rate of 12.5%, the UK can still charge the remaining 2.5% to bring in the company’s agreed 15% effective rate. With these pillars, The OECD estimates that countries can collect at least $ 50-80 billion in tax revenue each year..

See also  The Broadcasting Museum is just around the corner - Golheim

Opportunity or run to the bottom?

Ireland, which rejects the label ‘tax haven’, may have some reason to be upset. This is not a real zero-tax system like Bermuda, and its tax laws are meant to gain a real competitive advantage. In doing so, it attracts companies that never reach its shores, bringing jobs and money with them. About 180,000 people work for US companies in Ireland. Just 10 companiesIncluding giants such as Apple and Intel, Pays $ 7.2 billion in corporate taxes in 2020 – half of Ireland’s corporate tax revenue that yearIn the United States, on the other hand, federal states compete for business in a similar way. Ironically, Delaware is one of the least taxed states in the U.S. with this goal, calling the state Biden House.

However, according to George Dibb, director of the Center for Economic Justice at the Institute for Public Policy Research, a progressive London think tank interviewed by Quartz. Tax systems provoked What he describes A general “run down”, All of which – even the Irish in the world – are lost in the long run. High effective tax rates, on the other hand, can have the opposite effect: countries running upwards are really competitive and motivating to innovate in the services they can provide.

Lorenzo Magnani

The editorial team recommends other articles

In Wealth Doctrine

About international taxes




Latest articles

France (Women's Euro 2025 Qualifier): Analysis, Distribution, History and Writing

A major challenge Hervé Renard's French women's team will close their qualifying campaign with a...

Renard speaks before facing Ireland

Published on July 15, 2024 Updated on July 15, 2024 The French technician will make a...

Ireland bans American Bully XL dogs after fatal attack

The Irish government announced a ban on American Bully XL dogs on Friday after...

Frawley's stunning drop earns Ireland victory over Springboks

World of Zapping Fifteen 6 Nations Calendar 2024With the South African team leading the...

More like this

France (Women's Euro 2025 Qualifier): Analysis, Distribution, History and Writing

A major challenge Hervé Renard's French women's team will close their qualifying campaign with a...

Renard speaks before facing Ireland

Published on July 15, 2024 Updated on July 15, 2024 The French technician will make a...

Ireland bans American Bully XL dogs after fatal attack

The Irish government announced a ban on American Bully XL dogs on Friday after...