Global taxes on labour overtook levies on profits
in 2012 according to the latest
issue of "Paying Taxes" produced by PwC, the Big 4 accounting firm, in
association with the World Bank. The report published yesterday shows that
Ireland is among the countries from a total of 189, with the lowest total
Ireland got a 6th rank overall which includes the Total Tax Rate (tax
on profits, social security taxes and other charges such as rates and property
taxes), tax payments and time to comply.
United Arab Emirates (UAE) got a top rank followed by Qatar, Saudi Arabia, Hong Kong,
Singapore, Ireland, Bahrain, Canada, Oman and Kiribati.
On average globally, companies pay a tax rate of
43.1% on their profits, compared with 14.9% in the UAE, 25.7% in Ireland, 34.0%
in the UK, 64.7% in France, 49.4% in Germany and 65.8% in Italy.
The template company in the PwC study is a 60-person
domestic one and the Irish effective rate of tax is put at 12.3%
This tax level is not the reality for
multinationals in Ireland and Finfacts has calculated an effective rate of
2.5% for American companies operating in Ireland.
So if the Finfacts rate is used, Ireland's total
business tax rate would be at the level of Saudi Arabia and the UAE, the Gulf
Two key points:
1) Why is the performance of Irish indigenous
firms so poor given the benefit of the world's lowest business taxes?
2) The low employer social security cost
is reflected in one of the worst private sector occupational pension systems in
Europe with coverage for half the workforce while politicians and public sector
workers have one of the world's best schemes - - a guaranteed
payout linked to current earnings.
US company profits per Irish employee at $970,000; Tax paid in
Ireland at $25,000
Half of Ireland's workforce have no occupational pension
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