Oh for God’s Sake

Even vague connection with the base issues would stop people writing stupid pieces like this:

Will Ireland’s corporation tax rise see tech companies leave Dublin?
Analysts question if Dublin’s reputation as a leading tech hub could be undermined by new 15% tax rate

No, it’snot going to make a damn bit of difference.

Because the game wasn’t driven by Ireland’s low tax rate. It was driven by the American tax system.

If you made profits in foreign and then kept them in foreign then you didn’t pay American corporate income tax. At which point it’s worth striving around to find some lovely low tax place to make your foreign profits in.

Now you pay US corporate income tax – with strings ‘n’stuff but still – on worldwide earnings, whether you bring them back into the US or not. So, global tech company. Your foreign tax bill is deductible from your US one now. Striving around for low foreign taxes doesn’t actually matter any more.

It’s only if you’re not US domiciled as a company that low foreign taxes matter now. And as none of them are…..

It was always the American tax system driving this, now that’s been reformed it’s over.

5 thoughts on “Oh for God’s Sake”

  1. “Even vague connection with the base issues would stop people writing stupid pieces like this:”

    It’s the Grauniad.

    So – I hate to say this – you’re just flat wrong. Writers for the Guardian are not required, nor encouraged, to base their twaddle on reality.

    That would be cultural appropriation.

  2. Couldn’t the businesses just break themselves up with the more profitable businesses owned in Ireland (or wherever) and the less in the US?

    Come to think of it is this why Facebook is thinking of moving a lot of software work to Europe?

  3. The US government has blocked efforts by large US corporations to merge into and thus become foreign corporations. I wonder though if it could reach a point where VCs backing so many early stage companies might decide that if a venture appears likely to succeed that it might be worth turning into an Irish one quick before it gets big. Perhaps it would not be worth the bother at a 20% federal corporate tax rate vs a 12% or 15% Irish one, but should those US rates increase I wonder.

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