Public Expenditure Minister Brendan Howlin says he is confident the
Government will secure the necessary €300m of public sector savings this year
after Labour Relations Commission chief executive Kieran Mulvey won agreement on
a new deal.
THE Government has effectively stumbled into what might now be
called a third Croke Park deal with the public-sector unions.
APPLE is the sexiest company on planet Earth. Its tax affairs are
in the spotlight both because of Apple's sheer size, and also because political
posturing against semiconductor companies would fall flat in the media.
SOFT drinks maker Britvic will merge its Irish and British
operations and close a warehouse in the North and as part of a new strategy
announced with its interim results.
Measures to spread the financial burden of failed pension schemes
more evenly on members will not be included in legislation being published
Ireland’s reputation took a battering at a high-profile US Senate
hearing yesterday where the country was labelled a “tax haven” in an
investigation into the offshore tax practices of technology company Apple.
In Britain last week, Margaret Hodge, chairwoman of the public accounts committee there, told Google’s northern Europe boss, Matt Britton, his company’s behaviour on tax was “devious, calculated and, in my view, unethical”.
This week, Apple made a lengthy statement to the US senate, explaining its global tax strategy. The core of the statement was that tax is a cost and that Apple needs to minimise costs to remain competitive. It also made the point it does not use tax havens to reduce taxes on US sales, but made no such argument in respect of non-US sales, which is where the use of its Irish companies comes into play.
For companies such as Google and Apple, the attraction of Ireland is less about our low corporate tax rate and more about the fact that companies can structure arrangements to pay significant royalty fees on valuable intellectual property. These fees are paid to a low-tax jurisdiction (or tax haven if you prefer) effectively reducing taxable profit in Ireland to negligible levels relative to the declared revenues. As the valuable intellectual property is not owned by an Irish tax-resident company, it follows that the significant profits should not be earned in Ireland. Provided the royalty payments to the tax haven jurisdictions are at arm’s length, the structure is tax-compliant.
If the basic game plan is for Dublin to continue doing quietly what it has always done in the business tax sphere, trouble is mounting rapidly. The Apple revelations suggest a system the Government does its utmost to protect provides crucial legal cover for international businesses to minimise their tax exposure to the point that they pay only negligible amounts.
Even if everything is carried on within the exacting letter of the law, it does not look good when a company’s operations here make vast profit and it pays next to nothing in tax. To say as much is not to diminish the importance of the multinational sector when it comes to the creation and protection of employment.
Perception is crucial in the international arena, particularly as the Coalition seeks to rebuild the State’s reputation in the wake of the EU-IMF bailout. It cannot be in the Government’s interest to have Ireland portrayed as a soft touch, open to exploitation by companies seeking to shelter their income from the tax authorities in places such as Washington. This is all the more so as governments around the world seek to rebuild their battered finances in the wake of the financial crisis.
Irish ExaminerThe tax consultant, who did not want to be named, claimed that the “double Irish” and another controversial tax mechanism known as the “Dutch-Irish sandwich” would be gone within 18 months.
This complex mechanism enables an Irish onshore company to make royalty payments to an offshore Irish company, which in the case of Apple is based in Bermuda. It has been the subject of much criticism.
A spokesman for the Department of Finance said, “International tax planning takes advantage of these differences in national systems and rules. The best way to combat such arrangements is for countries to work together — at EU and OECD level — to examine these structures and consider how international rules can be implemented to ensure fair levels of taxation. Ireland is fully supportive of international efforts in this regard and is an active participant in the OECD project on base erosion and profit shifting which seeks to deal with these issues.”
Ireland’s tax regime is currently the subject of intense scrutiny because of US Senate hearings into Apple’s tax affairs.
Currently Glanbia’s group finance director — a
role she has filled for the past four years — Ms Talbot will formally become
group managing director-designate at the beginning of next month, with the
appointment of a new group finance director expected “in due course”.
Euro Topics reports: The Islamic-conservative AKP party, which rules with an absolute majority in Turkey, is preparing a law that would completely ban advertising for alcoholic beverages and considerably restrict the sale of such products. On Monday a list of states was published that have similarly rigorous bans, including Bangladesh, Egypt, Yemen and Saudi Arabia. For the conservative daily Hürriyet such bans have no place in a democracy: "Democratic states don't impose bans but instead try to influence consumer behaviour. In order to reduce excessive consumption, they try to protect children and youths as target groups and warn them of the harmful effects of alcohol. If we look at just this political field we can say that the alleged 'progressive democratic understanding of the AKP' is more a kind of Islamic fascism."
Spain came in second to last place at the Eurovision Song Contest in Malmö on Saturday. Since the voting for the most part has nothing to do with the quality of the performances, it would be better just to give the event a miss in future, the conservative daily ABC writes: "Although they did their job well, our representatives at this yearly European musical romp - the group El Sueño de Morfeo - once again failed in grand style. This edition of the gala - flamboyantly staged, as it is every year - saw us take a surprising second to last place. And like so often in the past, it was clear that those countries that see eye to eye in politics and culture unabashedly gave each other their votes. For that reason many sceptics say that in times of crisis we should just spare ourselves the trouble of participating in this camp and commercial music festival. That would not only cut costs, but also spare us the shame of such a pitiful result."
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