12 posts • joined 8 Jun 2012
Large legal firms are heavily involved in making these tax structures - along with the big four, Deloitte, KPMG, E&Y and PWC, so don't just blame accountants :)
Thanks guys, the interesting note I'd love to read in Google's or any of these companies accounts would be something like this (based on a theoretical 100 euro profit before tax):
FACTORS AFFECTING TAX CHARGE FOR PERIOD
The tax assessed for the period is lower than the standard rate of corporation tax in Ireland (12.5%). The differences are explained below:
Profit on ordinary activities before taxation 100
Profit on ordinary activites multiplied by standard
rate of corporation tax in Ireland of 12.5% 12.5
Actual tax liability incurred: (€16 x 12.5%) 2
Negative goodwill associated with purchase of
Motorolla Inc (20)
Amortisation of intangible assets
(IP/royalty agreements) (20)
Utilisation of Tax losses (20)
R&D Tax Credit (4)
Group Relief (10)
Capital allowances (10)
Profit Before tax €100 - €84 = adjusted profit of €16.
€16 x 12.5% = 2
The company would pay 2 euro corporation tax to the Irish Revenue,
Afterwards, they would file a dividend withholding tax return (€98 bank transfer to a dutch company).
Ireland has a double tax treaty with Holland, so 0% withholding tax to the dutch company.
After that I'm not sure what happens - I presume the dutch revenue takes a cut, before dividending it out to Bermuda or other offshore countries.
I thought Google was only allowed to do this in the EU - but Google Australia must be a subsidiary of one of the Google Ireland companies with licence / royalty agreements between the two.
The tax rate in Ireland is 12.5% which is a fantastic tax rate. I'm an accountant who does a fair few corporation tax returns (mostly my clients don't pay Corporate tax either because t hey are making losses or that they will be taxed an addition 12,5%.
Similar to the UK - This tax rate is useless for people who live in Ireland (and not so great if you live in the EU or elsewhere) because once you pay CT, you don't get a credit when you finally pay a dividend or salary/directors bonus out of your company which will be taxed at your personal rates which are (very roughly) when you include PAYE, ER/EE Prsi and the "Universal social charge" between 30% (lower bracket) and 55%.
In practice it means most directors would pay a bonus and get hit with the Payroll taxes instead of paying the extra 12.5% Corporate tax.
If you live in Europe - but have an Irish company, you pay 12.5% Corporation tax, and as there are double tax treaties between Ireland and all the EU countries, you probably can qualify of 0% DWT (Dividend Withholding Tax) - but these dividends would be taxable in your country of residence on your personal tax return.) Say in France/UK/Italy, this would throw your liability over 30-40% including the Irish CT.
Ireland's Company law and Tax code is almost identical to the UK - Everything is very similar. We copy everything the UK does except we have a lower rate of CT, and have very friendly transfer pricing policy towards this tax structure that should be renamed "the bank transfer" and imho is money laundering.
Dividends (from after tax profits) go from one tax haven, (a respectable EU one called Ireland) to some kind of charity vehicle in Holland (bank transfer only) to another REAL tax haven (bermuda and company where I assume you don't even have to declare your income never mind produce a DWT computation).
That doesn't sound right does it?
Ireland is the first leg of the journey -
Google has 5 or 6 companies registered at the companies office (e.g. Google Ireland Limited (368047), Google Commerce Limited (512080), Google Ireland Holdings (369511) and Google Voice Ltd (459359)) if you want to search yourself), all but one are unlimited companies (which means they don't have to publish public accounts - just an audit report and annual return, and we don't get to read notes explaining how the charge to corporate tax was reduced to 2% (or whatever rate Google boasts about it's worldwide effective tax rate) instead of 12.5%).
But with licence agreements (god knows what kind of transfer pricing happens between the 7 companies in Ireland, EU and Bermuda) - All their expenses in Ireland are probably under the R&D Tax credit scheme so 25% every cost they have here (Google are a huge employer in Dublin with about 3,000 people employed) - can be offset against the CT liability. There are also very friendly rules for holding companies in Ireland and for moving Intellectual property / patents/ offsetting losses etc... to the emerald Isle.
Even if Google pays only 2% CT here - the actual figure paid must be massive especially if Ireland has Licencing agreements with it's subsidiaries worldwide that connect to Ireland (judging by the aussie response this must be the case) - Also VAT and Payroll taxes (mostly VAT should be paid to the respective EU countries for B2C transactions but for selling directly to business, it could normally be classed as a intra eu charge (used to be called fourth schedule services) and would be 0% vat subject to the reverse charge basis), but the employment and payroll taxes are high (for Ireland).
- Ireland was still able to bankrupt itself even with all the inward investment and googles global CT of whatever % -. That's how inept we are at managing ourselves as a country.
- MNC's in real terms I think only employ 150k - 200K people in Ireland (and if you allow for spin off work from MNC's being here) perhaps another 200K people. The other 1.7 Million working here work for the SME market. Incredible small market compared to the UK et al.
- I only use Google as an example as it's the one I follow on the companies office - for other companies look here www.ida.ie
- Nothing against google's products (migrated to Gapps, have a firm android app etc...) so I've nothing against them except that the Irish market is so small and pointless to them, that they still haven't released the Nexus 10 here, and also I'd prefer they paid a reasonable amount of tax in EU (not asking for 30% + but at least pay 12.5%).
- HMRC lowered UK CT to 19% I think? So It's trying to compete with Ireland here, also HMRC has some interesting things for non doms with a flat tax rate (which I think ranks in the same category as what Ireland/Holland does for MNC's).
-MNC's are so important to Ireland now that Ireland needs to get far more strict so as not to piss off everyone else who (UK, Germany, Australia etc...) who will force some change in policy and sink Ireland's advantage -
- I can't see Ireland getting away with it for much longer without making some kind of effort to police the crazy transfer pricing thats going on and to make sure our partners (UK etc...) get a reasonable deal.
- I think the US may be happy with Ireland because at least it stops foreign countries from getting AMERICAN companies taxes :). Anyway Obama is Irish so hopefully he will veto whatever Australia is trying to do with the ODCE :).
- Go to page 8 for an explanation from the IDA on how Google can lower it's CT from 12.5% to 2%? - http://www.idaireland.com/news-media/publications/library-publications/ida-ireland-publications/IDA_Tax_2012.pdf
- sorry for typos and poor wording /structure - it's late!
Ireland brings An uncompromising level of stupidity (or corruption?) to everything she does.
it could be just a conspiracy theory BUT....
Word in the fields and across the townlands is that The Irish Garda's new cyber intelligence division is behind these attacks in Donegal, trying to destabilise the region a la Mossad in an effort to bring the six counties back into the fold and secure valuable oil fields off the north east coast.
The virus spreads via infected USB keys to be carried across the border and into Derry, And from Derry threatens to infect all of northern Ireland. Currently the virus is stuck in "burnfoot" waiting for the town to buy its first computer. The code was deliberately obfuscated ( written in 60% Irish 30% English and 10% Shelta and compiled in MS paint) to hide it's political motives.
While the virus acts as nagware, in the background, it replaces google maps with a bitmap file showing Ireland as one political boundary. Hearts and minds.
Unfortunately the cyber Garda didnt get a budget for new computers (and the unions refused training) but did manage to salvage some evoting machines. Pending adjustments (upwards) to the croke park agreement , the unions will allow its members train up on the new system. Next module: ms paint level 2
This is written in the style of an Irish Sean focail (old sayings) and it rhymes for a double win. GG Madra.
PHRASE: Is minic a gheibhean beal oscailt diog
MEANING: An open mouth often catches a closed fist
So a direct translation "It's better to have a broken Irish virus, than a clever English one"
For more Irish Sean focails see here www.ireland-information.com/irishphrases.htm
Paul cowabunga says this is the best article on el reg ATM.
Or go to Hazro.co.uk - A uk company that deals in the same panels but the monitors are assembled in the UK
If it was two turds the price...
But retina's useable space is only 1440x900 right - so for productivity it's still not as good as 1920x1200?
Since Apple doubled the resolution (1440x900 -> 2880x1800), they can double the DPI and all the UI elements will be the same size, but be twice as sharp and detailed.
I don't think so but will OSX allow the user the option of NOT doubling DPI. So UI elements are a quarter of their typical size, but you can fit four times as much stuff on the screen.
I know little about OSX, but I'd imagine there's also a middle road of choosing some non-integer multipler (i.e. not 1 or 2) that would yield an "best-of-both-worlds" effect. Everything is a little sharper, you can fit a little more on the screen and it's only a little smaller. The wild card is how OSX deals with non-integer DPI multiples.
I have a 15inch with 1440x900 MacBook pro and the resolution is ok but have to wonder about the 11inch and 13 inch 1080p ASUS...ultrabooks
I would prefare Two turds (2/3'rds x 1449x900)
Ŷ Symantec software= designed by north Korean military cyber warriors to cause endless damage to civilian and US military assets.
There is only one test to join the elite of the united states airforce cyber command and that is be able to uninstall NIS cleanly from a windows millennium edition pc. No ones managed it yet.
Consistently Worse than any malware for 14 years.
Kim dotcom, that loveable, morbidly obese, modern warfare 3 legend, and uultimate German cyber killing machine.
He would look terrific in a cape.