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Over the past few years Ireland’s managed to attract serious investment from international companies, especially in the tech sector, thanks to its relaxed tax regulations.
That could, however, all be about to change. The country’s Department of Finance has issued a “policy statement” which Finance minister Michael Noon says “… for the first time … sets out Ireland’s International Tax Charter — a set of policy objectives and commitments for how we view and will deal with a variety of international tax policy issues.”
The revised policy may have come about after it was revealed that the Irish offices of a number of tech giants, including Google and Apple, played a central role in their multi-million dollar tax avoidance schemes.
In the case of Google, it was revealed to be part of a web of offshore bank accounts and transactions spanning across multiple other countries including Bermuda and the Netherlands that allowed the tech giant to pay just £6-million in taxes on £2.5-billion worth of sales in the UK.
That kind of tax avoidance, also practised by the likes of Apple and Amazon, led UK Prime Minister David Cameron to call for a global crackdown on the companies involved.
While Ireland appears to have heeded that call to some degree, it doesn’t look like it’ll be changing the 12.5% tax rate on trading entities that’s made it so attractive to investors.
“Aggressive tax planning by companies is a major issue for legislators across the world and it needs to be addressed. Ireland is very much involved in the process of addressing the issue,” says the policy statement.
The biggest change, reports Independent.ie, will see it try and put an end to the practice of companies being “stateless” for tax purposes.
It’s also becoming increasingly apparent that Ireland needs increased tax revenue from multi-billion dollar players like Google, Apple and Amazon to help pull the country’s economy out of the austerity-driven slump it currently finds itself in.
Image: Michael Osmenda (via Wikimedia Commons).