French and German officials are pressing Ireland to increase its low corporate tax rate in return for an aid package, setting the stage for a showdown over a policy long resented by Dublinâs European partners. Ireland views the corporate tax rate, set at 12.5 per cent, as the cornerstone of its industrial policy. On Thursday, Irish officials reiterated their determination to protect it. âItâs non-negotiable,â Mary Coughlan, deputy prime minister, told parliament. http://www.ft.com/cms/s/0/411e7e9a-f344-11df-a4fa-00144feab49a.html#axzz15fA3cB4N
Yes, but not in the Euro zone. Germany is pissed because all of their re-insurers domicile in Ireland. There will be no "bailout" of Ireland, but rather a loan to Irish banks through the IMF and backed up by the Irish govt. So its different than what went on in Greece. Ireland will default before it allows this to happen.
Ireland´s corprate tax regime is at the heart of its "industrial policy". I don´t know what industrial policy means in this context. The only industries settling in Dublin´s Free Trade Zone are bank shell corporations and insurance companies. And IBM´s European call center.
I think the ideal GDP composition should be Services = 40% Agriculture = 30% Manufacturing = 30% At present 70% Irish are dependent on Services.
One European official involved in the talks said that the corporate tax increase would be a casus belli with the Irish, and that Dublinâs strident objections could well keep it out of any final package. Source : http://www.ft.com/cms/s/0/411e7e9a-f344-11df-a4fa-00144feab49a.html#axzz15jGsgpdV
The Heard on the Street section had a good article on this subject (I think) this morning... http://online.wsj.com/article/SB100...40.html?mod=ITP_moneyandinvesting_7#printMode Euro Zone: Careful What You Wish for on Irish Taxes By RICHARD BARLEY European politicians tempted to take aim at Ireland's ultralow 12.5% corporate-tax rate might want to think again, and not only because their Irish counterparts seem willing to defend it to the death. While other Irish taxes may have to rise to rein in the yawning deficit, raising the corporate-tax rate could damage not only Ireland but its partners, too. First, Ireland doesn't even have the lowest headline corporate-tax rate in the European Union; that distinction goes to Bulgaria and Cyprus, both at 10%. Headline rates can be misleading. A European Commission study from 2009 found that Ireland's effective corporate-tax rate was higher than the headline, in particular due to real-estate taxes, while in many European countries it was lower than the headline rate. [Irishherd] Second, Ireland's low corporate taxes are crucial to its economic strategy. Corporation-tax revenue as a percentage of gross domestic product has been consistently higher in Ireland than the average in the first 15 EU members, according to the Organization for Economic Cooperation and Development, or OECD. They also are needed to help create a thriving export sector. Exports account for 80% of GDP, of which some 70%, or â¬110 billion ($149 billion), depend on foreign direct investment, according to Ireland's IDA investment-promotion agency. A one-percentage-point rise in the corporate-tax rate could lead to a 3.7% drop in foreign direct investment, the OECD estimates. Nor would the investment necessarily go elsewhere in the EU. Ireland competes, for example, with Switzerland and Singapore for foreign direct investment. Of course, Ireland has other attractions beyond its tax rate. It has a youthful, highly educated population, good infrastructure and benefits as an English-speaking country. It has moved from being a labor-intensive manufacturing economy to a more high-tech and services-focused model, with tremendous productivity gains. But as a small country, it has to offer something more than the big economies at the heart of the euro zone. That is something other European countries should bear in mind as they prepare to hand over billions of euros in loans to the Irish government. Write to Richard Barley at richard.barley@dowjones.com
The Irish government has been given a stark warning from some of the biggest American companies in Ireland on the risk of a mass exodus if the country's low corporation tax rate is raised. .... http://www.telegraph.co.uk/finance/...148882/US-firms-warn-Irish-over-tax-move.html
it isn't 'bad news for Google' - Google don't give a fek about Ireland or the Irish it Is BAD news for the 100,000 Irish people employed by US firms in a country where there are NO job prospects and anyone who can is seeking employment elsewhere and trying to emigrate to countries where there's even the remote possibility of employment