The corporation tax debate goes on – and rightly so. This is a very important issue. It is important for Ireland; it is important globally; and, of course, it is important for the companies.
One of the problems with the domestic debate is that it is almost completely inward focussed. It is pretty obvious that such a dependence on FDI is a significant threat to the domestic economy. Of course, it is also an opportunity if it can be expanded. It may be a misinterpretation but the Chinese word for “crisis” is commonly cited as being a combination of “danger” and “opportunity”.
So where are the dangers? The lead story in today’s Irish Times suggests that they are very much domestic in origin and has a set of “effective tax rates” for a group of companies
“including US software company Novell, which paid no tax on Irish profits of $315.6 million in the 16 months to March 2012.”
The company must sell a lot of software infrastructure in Ireland to generate that level of “Irish profits”. Novell also featured in the Irish Times Top 1000 companies recently. The details are here. The figures are notably different. The turnover figure doesn’t even match the profit figure given above.
It is likely that the figures in today’s report are for a Novell company registered in Ireland but one that is not deemed tax resident in Ireland. This distinction is not unusual or unique.
Yesterday, The Guardian ran a significant piece on Apple featuring details on Apple Operations International (AOI) and some links to an Irish employee. AOI featured in the recent Senate report on Apple. The section on AOI is very instructive and is below the fold. If you read it look for indications that this company should be liable for tax in Ireland and compare that to the number of indications that the company should pay tax somewhere else.Tweet