back to article Tech firms warn Ireland on bailout

Four technology giants have warned the Irish government not to touch Ireland's low corporation tax levels as the country struggles to finalise a bailout package with the International Monetary Fund and the European Union. Ireland will borrow around £85bn - the exact amount will be agreed in coming days – to underwrite its …

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  1. Anonymous Coward
    Alert

    Endless borrowing?

    "Any increase in corporation tax will have a damaging impact on our ability to win and retain investment in Ireland"...

    ... and so, if you want to pretend to be competitive, you need to borrow billions instead? Is that what the American Chamber of Commerce Ireland trying to suggest?

    And there was I believing that countries made money by creating wealth through manufacturing world leading products, and selling knowledge and services, and exporting those capabilities.

  2. Anonymous Coward
    Black Helicopters

    Corporate Tax

    This issue is by no means rsolved. The Germans and the French don't like this low corporate tax, and argue that it provides an unfair competitive advantage for Ireland.

    So stay tuned.

    1. Destroy All Monsters Silver badge
      Big Brother

      Unfair competitive advantage?

      "Hey, you are shaking down your marks less than I do? That's UNFAIR! How can I afford all these political handouts and stuff?"

  3. Danny 14
    Happy

    hah!

    "But HP, Intel, Microsoft and Google have warned that the country's low company tax levels are key to OUR LARGE PROFITS."

    There, fixed that for you. And as if the government didnt know this already. Still 10% of a few billion is better than 20% of sweet FA.

  4. Anonymous Coward
    Anonymous Coward

    TAX dodgers

    Perhaps if these companies weren't using loopholes to reduce their tax bills to next to nothing, the people of Ireland wouldn't be in such a situation.

    1. Mage Silver badge
      Pirate

      Well said

      "Perhaps if these companies weren't using loopholes to reduce their tax bills to next to nothing, the people of Ireland wouldn't be in such a situation."

      The fact is some are greedy parasites and move at drop of hat (DELL). They are not even paying 12.% or their American liabilities.

      It's the Stupid Irish government allowing the loop holes.

      The ONLY people in Ireland that have ever paid all their tax liabilities properly are the pure PAYE workers with no sideline jobs.

      1. Destroy All Monsters Silver badge
        Big Brother

        Or maybe fatsos need to slim down, not get more money for food

        Hint to the clueless: these "parasites" are providing jobs which are then income taxed. Not good enough, comrade?

        http://mises.org/daily/3405

        "The Irish economy rests on the precipice of devastation. Government interventionism has left Ireland with little room to maneuver in this difficult economic climate. The answer to Ireland's economic woes is not further government intervention in the economy, but a return to economic liberalism, small government, and sound monetary policy. Ireland needs to look closely at Austrian economic theory and take a step back from the dissolving, failed Keynesian model. Ireland needs to return to a firm base: it must eliminate, or at the very least curtail, its leviathan public sector; it must bring inflation under control through responsible monetary and fiscal policy; and it must cut down government economic controls in order to bring lasting stability to its economy. The only sound plan can be to cut public spending, eliminate social-welfare programs, and cease propping up failing sectors of the market. A drastic turn to responsible economics is the only legitimate way to escape the deep rut Ireland finds itself in. If the Celtic Tiger is to sharpen its claws once more, it will need to grind them on the whetstone of the free market."

        1. GrumpyJoe
          WTF?

          I was sort of with them...

          until "eliminate social-welfare programs" - so they are saying they are happy with the reintroduction of the poor house?

          I'm fully employed at the moment, but just over 2 years ago l lost my job in the financial industry and was on benefits for 5 months - are they saying that I wasn't due that for all the money I paid in (and bear in mind this was JUST JSA - £60.50 a week or so - not thousands like the Daily Mail put out).

          I'm all for financial prudence, but pretending that you will NEVER fall on hard times is a losing proposition.

        2. Al Jones

          Ireland's "leviathan public sector'

          Just one problem - Ireland's public sector is actually smaller than that of it's European partners. Ireland's schools have larger class sizes, Ireland's police force is smaller on a per capita basis than most other European countries, and as for the Defence Forces.......

  5. Anonymous Coward
    Anonymous Coward

    Simple solution

    I'm not preparted to subsidise rich companies by paying higher taxes myself. So, let them move and then just impose taxes on them for any service they offer that my citizens access and also tax them for moving.

    Yes I know they provide some things via the Internet but it's not impossible to tax that. Once one country does it others will follow.

  6. Anonymous Coward
    WTF?

    £85,000,000,000

    Very very roughly worked out.

    Ireland's population is about 4.5 million

    That works out at roughly £18,800 for every Man, Woman and child living in Ireland.

    Based on working age population 15-79 which is a massive overestimate and assuming 100% employment.

    That would be £24,723 for every Man and Woman of working age in Ireland.

    The WTF meter is off the scale with this one.

    1. Grease Monkey Silver badge

      So?

      The cost of the baillout of the British banks was over ten times as much. The UK government borrowed this through normal channels, which probably means that it's at a higher rate of interest.

      1. CD001

        Ummm...

        ... but the population of Britain is about 60 million as opposed to 4.5; so per-head we're borrowing less, no?

        1. Anonymous Coward
          Anonymous Coward

          Maybe

          Per head borrowing may be less, but per hed payback is probably higher due to higher interest rates.

        2. Anonymous Coward
          WTF?

          RE: Ummm

          I think even the US ended up only borrowing about $1000 per person in the end.

          Also, the majority of UK bank bailout money came direct from the UK Government, i.e. the UK taxpayer.

          So yeah, WTF? Where has all of Ireland's money gone and who's been spending it?

          1. Anonymous Coward
            Anonymous Coward

            Not really

            "Also, the majority of UK bank bailout money came direct from the UK Government, i.e. the UK taxpayer."

            Not as such no. It came from money they had already borrowed.

            1. Anonymous Coward
              Anonymous Coward

              RE: Not really

              Erm, yeah. It did didn't it.

              Hmmm

  7. Paul Johnston
    WTF?

    crucial to its competitiveness.

    Surely the whole point is the country was not competitive!

    If it was it wouldn't be in state it is!

    Spending more then you bring in has (among other issues) brought the country to the state it is in now.

    What they mean is you let "US" make the money by being in the EU but don't think about having the same level of corporate tax the rest of the EU has.

    1. David Evans

      @Paul Johnston

      "competitiveness", in terms of exports and manufacturing has very little to do with the situation Ireland is in right now (in fact its one of the few bright spots in the economy); this main issue is bad debt caused by a massively overhyped property market, and loads of people defaulting on their loans (and not "sub-prime" types either).

      Low corporate tax does bring in investment and jobs and it makes sense to protect it; it makes far more sense to tax other areas of the economy; this is a country with no property tax (council tax/rates) no water rates and 50% of the working population pays no income tax at all! Sadly, and I say that as someone who lives here, that kind of model was never going to be sustainable, and I expect all of these areas to be addressed this week. Unfortunately, the cost of living here is still really high, and although its gotten a little cheaper over the last couple of years, prices still outstrip the devaluation in net incomes and its going to get a lot worse. Disposable income is going to become a fond memory for most of us for the foreseeable future.

      1. Chimp
        Headmaster

        Whoops, forgot the title

        Ireland's problem, as noted, is property based. Low corporate tax rates (by Euro standards) and a virtually tax free property market created a bubble.

        Low corporate taxes provided lots.of well.paid jobs. Getting rid.of them is a solution that can only appeal to the red.hair shirt brigade.

        The answer is a land based tax system. The simplest way of doing that is to put a graduated stamp duty on land sales. Around 20% during.the first year of ownership,.and dropping to.around 5% over five years, sounds about right.

        Of course, you'd.need an equivalent.for equities.

  8. Alan Bourke
    Unhappy

    They would be mad to touch it.

    Since a low corporate tax rate is one of our few unique selling points, drastically changing it would have very adverse effects on our ability to pay back our loans.

  9. Dan 55 Silver badge
    Grenade

    It's not as if it should matter to them anyway

    Aren't they using Ireland as a stepping stone from the US and taking of advantage of Irish law to pay practically nothing in Bermuda or the Cayman Islands or somewhere?

    Call their bluff, I say.

  10. BristolBachelor Gold badge

    Irelands low corporate tax

    Yeah, lots of companies funnel their income through Ireland to declare it there and pay the lower tax in Ireland. The tax is pretty much the only thing that Ireland sees. The employment is all over Europe. The money is spent all over Europe.

    The companies don't want to pay more so they say don't raise it, but if Ireland raises it a bit, they will still pay it. If Ireland raises it a whole lot, then maybe they will funnel their money elsewhere, but that is better than bankrupt.

    On a side note, why is it that if I did it, it would be called tax evasion or money laundering, and I would be branded a terrorist?

    1. CD001

      You reckon?

      ----

      The companies don't want to pay more so they say don't raise it, but if Ireland raises it a bit, they will still pay it.

      ----

      You reckon? Poland is looking like a more attractive proposition for some of these companies already (Dell for instance).

    2. The Fuzzy Wotnot
      Pint

      Indeed!

      Wars, conflict, it's all business. "One murder makes a villain. Millions a hero". Numbers sanctify. - Charlie Chaplin

  11. JaitcH
    FAIL

    Bush' America gave business all sorts of tax breaks ...

    and look at America now.

    Bankrupt!

  12. Grease Monkey Silver badge

    Causes

    As far as I understand it the cause of this particular banking chassis is that a lot of large depositors have pulled their money from Irish banks in order to deposit it at better rates in other countries. This has left the banks with what amounts to a serious cash flow problem. This pretty much proves that the world has learned precisely fuck all from the various financial problems of the last few years.

    That a country's economy can be put into dire straits by a run on it's banks mostly by offshore concerns is ridiculous. Big business is still being allowed to run the world and ruin it's economy. We need unified international laws that not only control banking, but control big business' use of banking internationally.

    The corporation tax issue is of course part of that and it's a game that most countries have played in the past.

  13. Wind Farmer

    Not even 12.5%, due to tax loopholes

    It has been suggested that atleast one large multinational is paying very little tax in Ireland, due to adopting complex company/tax structures and Irish tax loopholes:

    http://www.economicpopulist.org/content/google-double-dutch

    http://www.cfoinnovation.com/content/tax-and-cfo-how-save-billions-your-bill?page=0%2C1

    http://shareholdersunite.com/2010/10/25/google-ta/

  14. John G Imrie

    Turkeys write letter ...

    Refusing to vote for Christmas.

  15. Frank 2
    FAIL

    Offices in Ireland are their *European* offices

    "When we compete for jobs and investment we are competing not against the European Union, but against countries such as Singapore, Israel, India and China."

    Utter bullshit, they already have factories/offices there, the ones in Ireland are to serve the EU.

    1. CD001

      Sort of...

      The countries Ireland is "competing" with in this instance are EMEA countries so you can keep Israel in the list but yeah, drop Singapore, India and China... though you'd need to factor in the emerging economies in the former eastern bloc countries.

      Then again - those are the same countries that every OTHER country in the EMEA is competing with so... *shrugs*

      1. Anonymous Coward
        Anonymous Coward

        What's wrong with the Euro

        So every company operating in the EU needs a EU tax base. Companies will therefore aim to set up that base in the country that is the most financially advantageous. All of which makes perfect sense.

        This, however, shows up what's wrong with the Euro. Greece is in trouble, people panic the Euro will collapse. Ireland is in trouble, people worry the Euro will collapse. We have a single currency in the Euro Zone, but we do not have a single economy. So each time one of the econmies within the Euro Zone looks shaky the Euro itself looks shaky. At the very least the Euro zone needs a single taxation system and of course everybody knew this before the Euro came into being. The EU knew full well that suggesting that taxation, banking law, etc, would have to be centrally controlled within the Euro zone would have meant no country would have signed up to the euro.

  16. The Fuzzy Wotnot

    Here we go!

    I was waiting for this to raise it's ugly head! The country has a slight cash-flow problem, the tech companies that made a beeline for the place way back in the 90's will all start threatening the leave if the Gov even so much as thinks about putting the costs up!

  17. petep
    FAIL

    The Butcher's Bill

    According the the UK Office of National Statistics, there are 29,190,000 people in the UK in employment. If the UK's "contribution" to rescuing Ireland is going to be £7 billion, that's £239.81p from each tax-payer in Britain.

    Doesn't seem like a lot right now, but who says it will stop at £7billion, and of course, there will be Spain and Portugal next with the begging bowls.

    It's not as if we're in any great shape in Britain at the moment. Charity begins at home...

    1. Anonymous Coward
      Anonymous Coward

      What "contribution"?

      Britain is trying to "sell" a commercial loan to Ireland (which doesn't necessarily want it) at commercial interest rates, so that Irish Banks don't default on the debts that they owe to British Banks.

      If the Irish Banks were allowed to fold, the actual cost to the British economy would probably b greater than 7 billion, and it wouldn't be a loan that would be paid back, with interest!

  18. sT0rNG b4R3 duRiD
    Thumb Down

    I blame Brian

    I remember him as health minister. It's been a while but I still can't comprehend how he got to becoming Taoiseach.

    That said, if he can pull Ireland out of the crap it's in now, he'll earn my (grudging) respect. Still won't like the man, though.

  19. Francis Fish
    FAIL

    After the Ponzi scheme ends

    If it's ordinary people like you and me we just have to take it on the chin and remember we signed a piece of paper that said markets can go down as well as up.

    No sympathy for the banks that screwed up. Tough shit, guys. the rest of us learned that money can disappear when the music stops - why should you not take the loss like everyone else has to?

    And there's the whole thing about the EU riding roughshod over Ireland's sovereignty - when they said they didn't need any help for at least 6 months. The English used to say the Irish were to childlike to run their own affairs - now the EU bureaucrats say the same thing. Screw 'em. And screw bailing out people who should have known better.

  20. Colin Critch
    Happy

    We are all doomed! In the UK we owe £65,000 each (Above £4 trillion )

    In the UK we owe £65,000 each (Above £4 trillion )

    http://www.thisismoney.co.uk/news/article.html?in_article_id=509002&in_page_id=2

  21. Anonymous Coward
    Anonymous Coward

    Irish tax - nice...

    But still not low enough for Bono. U2 relocated their publishing activities to Amsterdam in 2006 to avoid tax. Didn't stop him telling everyone how to spend it though.

  22. Anonymous Coward
    WTF?

    Errrr.....

    "The statement was supported by Intel Ireland, Microsoft and Merrill Lynch. US tech firms played a crucial role in securing Ireland's reputation as the Celtic Tiger economy by bringing manufacturing and support jobs to the country."

    This would be the wonderful Celtic Tiger economy that has basically imploded leaving thousands of empty and half finished housing estates. An economy that was so strong it was going to dominate Europe. An economy full of US companies avoiding paying as much tax as they can. An economy that I, as a UK tax payer, am now expected to bail out having already had to help bail out the UK economy.

    So the UK tax payer is now helping basically pay Intel and Microsoft's tax bills......

  23. Anonymous Coward
    Thumb Up

    Fuckin-A!

    That is all...

  24. Anonymous Coward
    Anonymous Coward

    So let me get this straight

    I am expected to be happy for my country to pay about £14 billion to Ireland (half through the EU and half directly) rather than paying £14 billion off our debt so that Ireland can then use its uncompetetive corporation tax rates to take investment and business away from our own country? Like George Osbourne has been telling us on the news today.

    Personally I would rather have Ozzy Osbourne as chancellor - at least we'd get cheap drugs and all the bats we can eat to take teh sting out of our imminent crushing penilessness.

    1. Grease Monkey Silver badge

      OK

      So we don't lend the money to Ireland. Then what happens? Take a look at how tightly integrated their banking and finance is with our banking and finance (directly and indirectly via the EU and Eurozone) and figure out what will happen.

      Basically they would take down our economy and the eurozone economy too. That could in turn lead to a worldwide recession the like of which have never been seen before. All of which goes to show that the system is totally screwed and needs redesigning from the ground up, but that's not going to happen any time soon.

      1. Anonymous Coward
        Anonymous Coward

        Bout time it all ended

        If our banks have exposure then give them the choice - suck it up and take the loss - or pay the bailout money themselves (remember that the money we are talking about here is on a par with the amount the same banks will be paying in Christmas bonuses).

        If they go for taking the loss and it looks like it will cause stability problems in the UK then we go all Northern Rock on them - remember normal investors are covered to £50,000 and if we, the people, are going to have to make sacrifices to fund other people's greed and stupidity (we are already paying for our own greed and stupidity) then we should at least get the benefits of owning the banks. Need to make sure pension funds are protected I grant you, but that should be chickenfeed compared to the other problems we have.

        If it looks like taking down the Eurozone then, with all due respect, it is time for the Eurozone to man the fuck up and grow a pair - these hard decisions (and equally hard actions) are for the Eurozone to make, not those of us whose countries have politely declined to join that club - we don't get the benefits of being in the Euro so why should we get the pain?

        And finally - there is no way Ireland's collapse will bring down the world economy - they are just not big or financially important enough.

  25. FreeTard
    Thumb Up

    As an irishman..

    ...I'm very happy that the IMF/EU are now running the show, and I'll tell you something, I'm not alone. The reason the country is in shite is beause of insane salaries to politicos and civil servants.

    Still, its a good laugh listening to the moaners on the radio & tv. Lovin' it!

  26. Eduard Coli
    Gates Horns

    So it is

    This is what happens when capitalism is used as foreign policy.

  27. FrankR

    scam

    The details of the bailout have still to be negotiated.

    Surely one proviso is to end this blatant tax scam.

  28. json
    Grenade

    Interesting how this will play out

    considering that the WB and IMF has been doing a tag-team for decades arm-twisting third world countries to cough up the dough (via implementation of new -- and often anti-poor -- policies) for 'development' loans.

  29. Bradley Hardleigh-Hadderchance

    The FT Times has this to say:

    So the welfare and wellbeing of a few (albeit monstrous) companies, outweighs the wellbeing

    of a nation (some would even say a race, but I would say they are wrong about dat).

    This almost sounds like a threat: "If you know what is good for you".

    Well, how I argued for hours about the meaning and definition of 'Fascism'.

    The fun we had, and I don't think anyone really came up with an answer that we could

    all agree on. However, were it today, I believe we could 'beg to differ'.

    Will I give you some Corporation chips with that Government burger?

    Ah go on go on go on - have some tomato tax!

    Just in case you change yer mind...

  30. Subs McNubs
    Black Helicopters

    Stop the bus. What the bejeesus is going on?

    These "corporations" are text-book socio-paths. Whoever decided that companies should have the same rights as a real person didn't really think it through - it allows people to disconnect their emotions and moral and ethical sensibilities from business practice.

    Also, can someone tell me why Indebted broke countries are lending money they don't have to more heavily debt laden countries to pay back borrowings to creditors who don't understand the meaning of bankrupt? Isn't this Akin to paying off one credit card bill with another?

    Bring out the gallows, I want to see heads roll before I emigrate eastwards towards our new masters.

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