I’ve seen the question asked – what’s the difference between a tax evasion scam and a tax avoidance scheme? The answer – someone like a Michael Noonan, or a Jean-Claude Juncker who will legislate so that what was illegal (the evasion scam) becomes legal (the avoidance scheme), and morality bedamned.
Last week in Ireland we had the much-heralded Web Summit (ah – the screams when the Wi-Fi broke down! They should try living in rural Ireland) and from it, an article appeared in the New York Times no less, in which the issue of Ireland’s tax-haven status was discussed by a Mark Scott. In the article there were a few quotes that caught my eye.
The first: “Companies are aware there’s a tightening of global tax laws,” said Brian Caulfield, a local venture capitalist, “But what Ireland brings to the table with its low corporate tax remains extremely competitive.”
That’s all very fine but of course we’ve all now heard of the ‘double-Irish’, where a company can be born in Ireland but raised in luxury elsewhere, its profits spirited away to a subsidiary in a no-tax haven.
A few weeks ago in the Dáil that bastion of the people’s interests, Finance Minister Michael Noonan, announced his budget statement for 2015, following which our national media hailed the crackdown on the ‘double-Irish’, the slamming of a few tax-avoidance windows. Mr Scott of the New York Times wasn’t impressed, however, nor were a few of those he spoke to at the Web Summit; when you’ve read what they had to say, ye won’t be so impressed yourselves.
‘Despite the crackdown on tax avoidance’, said Mark, ‘The open secret among many of the conference goers was that the recent changes to Ireland’s tax rules, many of which are expected to become law by the end of the year, still offer multiple ways for tech giants to maintain low rates. Ireland’s lawmakers even added extra allowances related to intellectual property and employees’ salaries aimed at helping companies reduce their overall tax bills.’
What’s this the saying goes – the Lord never closes one door but he opens another? Seems the same applies to our Finance Minister, and to this government.
To continue quoting from Mark’s article:
‘”Companies have six years to use the ‘double Irish’ structure before they have to figure out what to do next,” said Joe Tynan, a tax partner at PricewaterhouseCoopers in Dublin, who added that some international companies are trying to register to use the structure before a January deadline. And to entice companies to stay in Ireland, the government is working on plans to create a “knowledge development box” that would offer lucrative tax breaks for revenue and other royalties related to intellectual property held in the country.
‘Padraig Cronin, a tax partner at Deloitte in Dublin, said the incentives could allow tech companies based in Ireland to pay a tax rate of as low as 5 percent on profits from patents and other intellectual property held in the country. “No matter what anyone else introduces, we will introduce something that will be best in class,” he said.’
Fine, Pádraig, but I have a question – who’s the ‘we’ here, Deloitte or the Irish government? Or is that a superfluous question, are the finance industry and the government actually one and the same?
Towards the end of Mark Scott’s piece he quoted our Taoiseach, Enda Kenny: ‘We have nothing to be afraid of. The tax changes make the country more attractive for companies to invest here.’
Nothing to be afraid of? Not alone is this government prostituting Ireland before the world, they are selling us to the lowest bidder, in fact they are selling us to the lowest of the low, the vulture funds feeding on our flesh, the vampires sucking the life-blood from the economy.
But, Mr Kenny, you DO have something to fear. In last night’s plenary session of the European Parliament in which deeds similar to what you are still practicing were being discussed during the debate on Jean-Claude Juncker, Ireland and its dirty deeds were highlighted again and again by speaker after speaker.
It is time for Ireland to take a wider view on what we’re doing, on the destruction of national tax-bases we are now facilitating – including our own.