jump to navigation

Taxing times… August 30, 2016

Posted by WorldbyStorm in Uncategorized.
trackback

Well now. Reading Brian Keegan’s column on taxation in the SBP I was struck by his critique of David Cullinane, the SF TDs, recent comments that:

…it is blindingly obvious that with 68 per cent of all companies liable for corporation tax in 2015 “Subject to a tax rate of zero…the law is the loophole”.

Unlike speculation regarding the existence of little green men, the TD’s comments are a response to official figures obtained by him on foot of a parliamentary question. They merit some analysis. Why did more than two third of companies pay no corporation tax in 2014.

Before everything, fascinating that he feels the need to conduct this exercise, isn’t it?

Anyhow, away we go.

First up he argues that:

From a tax point of view it is usually cheaper to pay profits out as salaries and pay income tax, PRSI and USC on those salaries than leave accumulated profits in the company. No profit int he company no corporation tax gets paid.

Secondly?

It’s also necessary o think about what companies actually do… sometimes companies are used to put a structure on charitable activities and as such re expect from tax. Many companies, even if not charities, are so-called not for profit ventures… trade associations and the like run for the benefit of their members… the voluntary and semi-state sectors frequently operate through a company to meet legal or regulatory requirements… such companies don’t make profits and therefore they don’t pay corporation tax.

All very interesting. But one would like to know how many of each of these sub-categories there are. Unfortunately that not unimportant detail isn’t provided.

Still he continues by admitting to the fact that:

Then there are the controversial companies which are the target of most of the political and media comment, these would include companies which are Irish-resident but don’t have income which is charged to Irish corporation tax.

Interesting too how he shifts the spotlight away from Irish companies there.

Anyhow, praise of sorts for Cullinane:

To return to Cullinane’s comments, he did well to highlight the proportion of companies which re outside the corporation tax charge.

I don’t think though that it’s a loophole to make company profits chargeable to higher rates of income tax instead of lower rates of corporation tax. Tax loopholes arise when people pay less tax, not more.

And while he also admits too that there may be reason to look at charitable and voluntary sector businesses and where ‘Irish corporation tax starts and stops’ but… for there is a but…

By virtue of what so many of them do, many companies tend not to have profits with the tax charge, or pay them out so that those profits fall subject to income tax. That’s why two thirds of them don’t pay corporation tax.

It will be very educative to see where this discussion goes next. Good on Cullinane and his team for producing questions that elicit this sort of a response.

Comments»

1. Gewerkschaftler - August 30, 2016

What a despicable bunch of gombeen corporate arse-kissers – FG and the independents propping up their government.

“No, we don’t want a chance of getting nearly €3k per head of the population from the company with the largest cash mountain in the world. Instead we’d rather the rich kept getting richer.”

I hope the opposition give them a roasting over this one. I’d love to think that people might take to the streets over the issue but so many seem bamboozled by the FDI and ‘jobs’ smokescreens for daylight robbery.

Like

2. irishelectionliterature - August 30, 2016

Looks like FF are adopting a wait and see, pressure on Ross and Halligan though

Like

3. gendjinn - August 30, 2016

Must be out of flares to be throwing so much chaff. Did you hear the CEO of Mylan defending their price hikes because of the global financial meltdown of 08, terrorism and an uncertain world.

A real POS whose father is democratic senator Manchin (another POS).

Like

4. irishelectionliterature - August 30, 2016

Labour statement
https://www.labour.ie/news/2016/08/30/issues-of-sovereignty-and-reputation-at-stake-howl/#.V8Wo6EespqV.twitter

With €13 billion of corporate revenue at stake, the decision of the European Commission will inevitably be appealed by Apple. It is not conceivable that Ireland would not be attached to the process, given our national interest in the outcome of this matter. Indeed it is likely that many Member States will join in an appeal of this decision. On that basis, the Labour Party will support the Government in lodging an appeal so that this matter can be determined by the European Court of Justice, according to Labour Leader Brendan Howlin……

Like

Aonrud ⚘ - August 30, 2016

Choosing the ‘responsible’ option over any prospect of rebuilding the party then? I suppose it’s grimly consistent.

Liked by 1 person

WorldbyStorm - August 30, 2016

Wow. Just wow. Christ. What a shower.

Like

Bartholomew - August 30, 2016

‘€13 billion of corporate revenue at stake’

Shouldn’t that be ‘€13 billion of national revenue at stake’?

Like

5. ewolc - August 30, 2016

This part is interesting:

“The amount of unpaid taxes to be recovered by the Irish authorities would be reduced if other countries were to require Apple to pay more taxes on the profits recorded by Apple Sales International and Apple Operations Europe for this period. This could be the case if they consider, in view of the information revealed through the Commission’s investigation, that Apple’s commercial risks, sales and other activities should have been recorded in their jurisdictions. This is because the taxable profits of Apple Sales International in Ireland would be reduced if profits were recorded and taxed in other countries instead of being recorded in Ireland.

The amount of unpaid taxes to be recovered by the Irish authorities would also be reduced if the US authorities were to require Apple to pay larger amounts of money to their US parent company for this period to finance research and development efforts. These are conducted by Apple in the US on behalf of Apple Sales International and Apple Operations Europe, for which the two companies already make annual payments.”

http://europa.eu/rapid/press-release_IP-16-2923_en.htm

Liked by 1 person

6. sonofstan - August 30, 2016

This could be FG’s bank guarantee.

Liked by 1 person

CMK - August 30, 2016

Good point. Alas, they’ll make a bo**ocks of it anyway, and we’ll end up paying for this decision.

Like

7. WorldbyStorm - August 30, 2016

I sure hope so.

Like

8. Paddy Healy - August 30, 2016

EU RULING ON ILLEGAL IRISH STATE AID TO APPLE SHOWS THAT THE IRISH PEOPLE HAVE BEEN PLACED in MORTAL DANGER by FF, FG and LAB in GOVERNMENT over PAST DECADES by OVER-RELIANCE on INVESTMENT BY MULTI-NATIONAL COMPANIES
Full Comment http://wp.me/pKzXa-ua
BRITISH RULE IN THE NORTH AND THE EFFECT OF EU TREATIES INCLUDING THE MOST RECENT FISCAL TREATY IN THE SOUTH ENSURE THAT THE IRISH PEOPLE LACK THE FUNDAMENTAL SOVEREIGNTY TO PROTECT AGAINST THESE MORTAL DANGERS

Like

9. Allende Salvador - September 1, 2016

What about corporate share buybacks? Are they pre-profit?

Like


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: