Irish Independent
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.
Workers who fail to sign up to the new deal will not get to claw back their pay
cuts in future years.
And they will also lose the protection against compulsory redundancies contained
in the existing agreement.
The Government hopes the revised agreement will be accepted after striking
different deals with individual unions. They have received guarantees that
elements of pay now being cut will be returned in future years, and specific
arrangements on the freezing of increments.
But any union outside the deal will not receive these benefits. The legislation
being drawn up by the Government will freeze increments for three years.
However, unions that struck their own deals won concessions of pauses on the
payment, dependent on the income band, which soften the blow.
THE Government has effectively stumbled into what might now be
called a third Croke Park deal with the public-sector unions.
While Expenditure & Reform Minister Brendan Howlin stood back, periodically
waving the big stick of harsher pay cuts imposed by legislation, it was the
experienced chief executive of the Labour Relations Commission, Kieran Mulvey,
who pursued the tactic of negotiating with each union separately in each sector,
rather than a 'one size fits all' approach with the public-sector unions as a
whole, which proved to be the downfall of Croke Park II.
Though Mr Mulvey was involved in the original Croke Park II talks, he was more a
facilitator then.
This time, he was rolling up his sleeves and doing what Mr Howlin should have
allowed him to do almost six months ago.
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.
We are tax compliant, according to the OECD, but yet a subsidiary of Apple can
exist and not exist at the same time?
This isn't quantum mechanics, there's no Schrodinger's cat, both alive and dead
in the box at the same time. The company has to pay its tax somewhere, to some
nation.
Second, we have to recognise this story is not just about Apple. All
multinationals try to stop paying their taxes in some form in order to realise
the largest gain for their shareholders.
Last week British MPs excoriated Google's use of what they called 'smoke and
mirrors' using their Irish subsidiary to avoid paying tax in the UK, and there
have been many instances of companies like Starbucks and others using national
and international tax structures in ways that are not ethical.
Third, we must recognise that these actions to maximise shareholder value have
real world consequences.
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.
The proposals aim to deliver annual savings of £30m (€35m) as it creates a
combined British and Irish business unit under a single leadership team. The
group will also close two factories in England.
The company has also reached an agreement with Narang Group for the national
sales and distribution of Fruit Shoot in India, commencing mid-2014.
Irish Times
Measures to spread the financial burden of failed pension schemes
more evenly on members will not be included in legislation being published
today.
The Social Welfare and Pensions Bill had been expected to announce changes to
the priority order, which currently means that people who have already retired
have prior call on the assets of an insolvent pension fund ahead of colleagues
who are still working.
However, it is now understood the Minister for Social Protection Joan Burton
will postpone changes to pension schemes while the Government digests the full
implication of a recent adverse ruling in the European Court of Justice which
could see it landed with a bill for €300 million.
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.
The California-based firm was accused of avoiding tens of billions of dollars in
US taxes by sheltering profits in Irish “ghost companies”, which did not have to
pay taxes anywhere, under a special deal with the Irish authorities.
But, in the Dáil yesterday, Taoiseach Enda Kenny rejected claims that
authorities had negotiated special deals with any business. He also dismissed
the notion that Ireland was a tax haven.
“Ireland does not – I will repeat – does not do special tax-rate deals with
companies. We don’t have any special extra-low corporate tax rate for
multinational companies,” Mr Kenny said.
Speaking in Brussels, Tánaiste Eamon Gilmore said Ireland does not have any
special low corporation tax rate for multinational companies and that the tax
system was “based on Irish law”.
Tax avoidance is back on the political agenda with a
vengeance, creating the sort of uncertainty and headlines that make large
corporations with complex tax structures nervous.
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 Examiner
The Government will be forced to scrap the tax
arrangement known as the “double Irish” in order to avoid criticism of the
country’s tax system, says one of the most senior tax experts in the country.
The 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.
Siobhan Talbot is set to succeed John Moloney as
group managing director of Glanbia, at the end of this year — becoming the first
woman to head up a major Irish food company.
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”.
The move follows Mr Moloney — who has led the Kilkenny-based ingredients and
dairy giant for the past 12 years and has been with the company for a quarter of
a century — notifying the board of his intention to retire at the end of 2013, a
year earlier than his initial due date.
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."
Check out our
subscription service,
Finfacts Premium
, at a low annual charge of €25 - - if
you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to
support the service.
