**Dublin’s wealth is poached from other countries**
Rishi Sunak could be forgiven for casting an envious eye across the Irish Sea. In his Budget last week, Ireland’s finance minister Michael McGrath, instead of the dismal round of tax rises and spending cuts we are used to in the UK, announced plans for a sovereign wealth fund, which could have assets of 100 billion euros by the middle of the next decade. It would generate wealth for decades to come.
The sovereign wealth fund is a partial answer to a problem that isn’t shared by many other governments around the world: how to get rid of all the spare cash the treasury has accumulated.
There is nothing wrong with that in itself. Norway’s massive sovereign wealth fund has been a huge success, and, looking back, many people think the UK should have done something similar with the tax revenues earned from the North Sea when it was at its peak in the 1980s and 1990s. A wealth fund can even out good fortune between generations, and ensure the financial stability of the government even if the economy turns south.
But there is an important difference between Ireland and a country such as Norway. While Norway built up its surplus from a new industry, Ireland’s wealth is poached from other countries.
Ireland has been a low-tax base for a long-time, and justifiably earned plaudits for its commitment to being an attractive jurisdiction. And yet international efforts to coordinate the way corporate taxes are raised may inadvertently have contributed to a huge boom in the amount of money it raises. Rather than signalling a strong economy, in reality most of Ireland’s extra money is coming directly from the US and other European countries. And Ireland can’t expect to freeload in this way on the global economy for much longer – at least without provoking a huge backlash.
Just take a look at some of the numbers. Ever since it introduced its 12.5pc corporate headline tax rate, among the lowest in the developed world, Ireland has been a low-tax base. That rate is the reason why so many global multinationals, and especially the big American tech and pharmaceutical giants, have based their European operations there. Sure, they like the language, and Dubin and Cork have some decent bars. But they were mainly there for the low taxes.
Over the last few years, however, the amount Ireland collects has exploded. From 4 billion euros in corporate taxes in 2014, the amount rose to nearly 23 billion euros last year, just under 28pc of net tax receipts, a five-fold increase.
As it happens US multinationals have not massively increased their operations in the country. Instead, there is a far simpler explanation. The US-led effort to coordinate a global crackdown on corporate tax, pushed by President Joe Biden, may have backfired, and led to a huge boom in Irish tax revenues.
American companies that previously used offshore tax havens to protect some of their income now find it too difficult. As an alternative, they are parking more and more of their profits in Ireland, a low-tax jurisdiction, but not an out-and-out tax haven. The result? The figures have been distorted by vast amounts of profits “earned” and therefore taxed in Ireland.
Indeed, according to the Irish Fiscal Advisory Council, just three firms paid a third of all those corporate taxes between 2017 and 2021, of which Apple was the largest. Every time you buy a new charger for your phone, Ireland gets a bit richer.
Here’s the problem, however. It is impossible to believe that the scale of the Irish tax bonanza will be tolerated by the rest of the world for much longer. The EU has already flirted with plans to get a share of the money, with proposals flying thick and fast for measures such as direct levies on gross operating surplus, or pooled tax bills for multinationals. These proposals seem to be aimed at getting Brussels’ hands on some of this Irish money.
And the White House, after Joe Biden’s wild spending on a protectionist “green industrial strategy”, is now grappling with an off-the-scale budget deficit that has already weakened the US bond market and led to a cut in its credit rating. It is hard to see how either Biden, or a slightly-more-wide-awake successor, can ignore the vast amounts that America’s largest companies are now handing over the government in Dublin for much longer.
There was never anything wrong with Ireland setting a low and competitive corporate tax rate. Indeed, it very successfully encouraged local entrepreneurs, and inward investment in real factories and R&D centres, transforming a rural backwater into one of Europe’s most prosperous economies (heck, who knows, perhaps the UK should give it a try some time).
But the Irish tax rate may have turned into something quite different. The half-baked global tax agreement has turned it into a freeloader on the global economy. At a certain point that will surely become intolerable.
Ireland can discuss what to do with the bonanza if it wants to. And its Prime Minister Leo Varadkar can give pompous, moralising lectures to the rest of the world, such as when he accused the UK of “disengaging” with the rest of the world earlier this month, if he chooses too. And yet the blunt truth is that Ireland has turned itself into a parasite on the global economy – and sooner or later it will quite rightly face a clampdown.
The telegraph would be regarded in Britain and Ireland as a shit rag that platformed for Brexit
Lol The Telegraph really? That’s not a news source really, more like the printed version of 4chan 😂
The irony coming from a nation that built its wealth from stealing it from other countries including Ireland
Ireland can afford a sovereign wealth fund now so they might as well increase taxes to a normal level and not let big tech to profit to a ridiculous degree.
Pot calling the kettle black here.
Wasn’t the brexiters plan to just turn the whole of uk into a tax haven?
This is just the Brits at it again.
An allumnus of Balliol College would know all about freeloading, in fairness.
Written by a brexiteer who advocated to abolish corporation tax.
Please don’t post Tan propaganda here. They’re just angry they’ve become an irrelevant country.
Can you guess where multinationals send their money?
British Overseas Territories.
Salty Brexit bois throwing digs at Ireland.
The same people who wanted to cut corporate tax…
Not our fault ye fools voted to leave the EU without any real plans and wanted to remain part of the EU market. Ye screwed the pooch don’t be throwing digs at us.
I was against the low corporate tax rate but when you think about it for a minute and realise Hungary has a much lower corporate tax… mustn’t just be the taxation at work!
As an Irishman who has been decrying our tax haven status since the early Noughties, it still really sucks to find myself agreeing with anything in The Telegraph. Broken clocks and all that. Frankly I look forward to seeing what we as a nation can do when we’re not bending over backwards to pleasure as many multinationals as possible. Enough pick-me bullshit, time to invest holistically at home.
Everyone raising taxes
People and companies leave
Picachu face :0
Inevitable. It erodes everyone’s tax bases. It is different to the UK situation, doesn’t function the same way. But yes we have tax havens and I should imagine they will be finished off too at some point. And yes, there are some UK people who want to replicate it. It’s obvious some people didn’t read past the title because the author even says that himself. I don’t know why this discussion had to become a UK vs ROI thing, again…
Since Ireland came in to being it has never found a niche in the global marketplace to fill.
It’s entire economic fortune consists of undercutting what London does.
Ireland’s time is likely up simply because the EU cannot leave anything alone.
This is hilarious… British media is very mad re Irelands stance on Palestine.
Ireland has done more damage to it’s western ‘allies’ this century than China, Russia or any Islamic terrorist boogeyman. Quote simply Ireland should be bombed into the ground for starving Western democracies of desperately needed tax revenue, which is causing unsustainable debt, crumbling public services/infrastructure, and the unfair burden of overtaxation of the middle/working class.
The absolute irony of Britain, historically one of the most rapacious nations on the planet, complaining about their former colony “poaching” wealth with tax laws that comply with EU regulations.
Not to mention that British Crown Dependencies such as Cayman Islands and Jersey are literal tax havens themselves
Ireland is trying to be Switzerland it feels like. Act neutral on international affairs but take everyone’s money and support the bad guys when they can.
There should be minimum company tax in the EU. Ireland is pretty much like the Swiss. They drain the wealth of other nations while playing neutral and innocent.
Hahahahahahaha those poor deluded English people
Gah. Telegraph shit article and I clicked it.
Never post from this rag again.
Lmao
We should all be in favor of eliminating tax havens within the EU. Ireland, Netherlands,Switzerland, Malta, Monaco, Luxemburg, Cyprus all of these countries need to stop. The Eurozone needs to have tax rules that are applied across the board. We can not have single countries antagonizing the fiscal policy of the whole block for a short profit.
Brits are salty because the Irish beat them at their own game, but the need for destroying these fiscal paradises remains.
I think the telegraph has a crush on Ireland, they way they keep badmouthing them
Tax the shit out of them.
Ah, The Torygraph strikes again.
Serbs and Magyars will not be allowed to ride on cheap Orc gas too after the Bulgaria finally started to tax them.
The whataboutism in this thread is on a whole new level.
Brits will never not be mad that Ireland is a now a richer country than the UK. Malt and seethe.
Yeah just look at OP’s post and comment history guys. Guys a nutter.
Matthew Lynn before Brexit: “The UK should abolish corporation tax”.
Matthew Lynn and other Brexiteers after Brexit sitting in a pile of shite entirely of their own making: “Ireland is a parasite with their low corporation tax”.
Looks like someone is jealous
They Hate Us Cuz They Anus. Ireland is arguably the best country to live in the world, and this was achieved without having any resources like oil or being a colonist.
hahaha another british hit piece. Times don’t really change around these parts. The core of this is that the Irish economy is now more attractive than the UK because of their newly found isolationism. Stupidity on a national scale.
37 comments
**Dublin’s wealth is poached from other countries**
Rishi Sunak could be forgiven for casting an envious eye across the Irish Sea. In his Budget last week, Ireland’s finance minister Michael McGrath, instead of the dismal round of tax rises and spending cuts we are used to in the UK, announced plans for a sovereign wealth fund, which could have assets of 100 billion euros by the middle of the next decade. It would generate wealth for decades to come.
The sovereign wealth fund is a partial answer to a problem that isn’t shared by many other governments around the world: how to get rid of all the spare cash the treasury has accumulated.
There is nothing wrong with that in itself. Norway’s massive sovereign wealth fund has been a huge success, and, looking back, many people think the UK should have done something similar with the tax revenues earned from the North Sea when it was at its peak in the 1980s and 1990s. A wealth fund can even out good fortune between generations, and ensure the financial stability of the government even if the economy turns south.
But there is an important difference between Ireland and a country such as Norway. While Norway built up its surplus from a new industry, Ireland’s wealth is poached from other countries.
Ireland has been a low-tax base for a long-time, and justifiably earned plaudits for its commitment to being an attractive jurisdiction. And yet international efforts to coordinate the way corporate taxes are raised may inadvertently have contributed to a huge boom in the amount of money it raises. Rather than signalling a strong economy, in reality most of Ireland’s extra money is coming directly from the US and other European countries. And Ireland can’t expect to freeload in this way on the global economy for much longer – at least without provoking a huge backlash.
Just take a look at some of the numbers. Ever since it introduced its 12.5pc corporate headline tax rate, among the lowest in the developed world, Ireland has been a low-tax base. That rate is the reason why so many global multinationals, and especially the big American tech and pharmaceutical giants, have based their European operations there. Sure, they like the language, and Dubin and Cork have some decent bars. But they were mainly there for the low taxes.
Over the last few years, however, the amount Ireland collects has exploded. From 4 billion euros in corporate taxes in 2014, the amount rose to nearly 23 billion euros last year, just under 28pc of net tax receipts, a five-fold increase.
As it happens US multinationals have not massively increased their operations in the country. Instead, there is a far simpler explanation. The US-led effort to coordinate a global crackdown on corporate tax, pushed by President Joe Biden, may have backfired, and led to a huge boom in Irish tax revenues.
American companies that previously used offshore tax havens to protect some of their income now find it too difficult. As an alternative, they are parking more and more of their profits in Ireland, a low-tax jurisdiction, but not an out-and-out tax haven. The result? The figures have been distorted by vast amounts of profits “earned” and therefore taxed in Ireland.
Indeed, according to the Irish Fiscal Advisory Council, just three firms paid a third of all those corporate taxes between 2017 and 2021, of which Apple was the largest. Every time you buy a new charger for your phone, Ireland gets a bit richer.
Here’s the problem, however. It is impossible to believe that the scale of the Irish tax bonanza will be tolerated by the rest of the world for much longer. The EU has already flirted with plans to get a share of the money, with proposals flying thick and fast for measures such as direct levies on gross operating surplus, or pooled tax bills for multinationals. These proposals seem to be aimed at getting Brussels’ hands on some of this Irish money.
And the White House, after Joe Biden’s wild spending on a protectionist “green industrial strategy”, is now grappling with an off-the-scale budget deficit that has already weakened the US bond market and led to a cut in its credit rating. It is hard to see how either Biden, or a slightly-more-wide-awake successor, can ignore the vast amounts that America’s largest companies are now handing over the government in Dublin for much longer.
There was never anything wrong with Ireland setting a low and competitive corporate tax rate. Indeed, it very successfully encouraged local entrepreneurs, and inward investment in real factories and R&D centres, transforming a rural backwater into one of Europe’s most prosperous economies (heck, who knows, perhaps the UK should give it a try some time).
But the Irish tax rate may have turned into something quite different. The half-baked global tax agreement has turned it into a freeloader on the global economy. At a certain point that will surely become intolerable.
Ireland can discuss what to do with the bonanza if it wants to. And its Prime Minister Leo Varadkar can give pompous, moralising lectures to the rest of the world, such as when he accused the UK of “disengaging” with the rest of the world earlier this month, if he chooses too. And yet the blunt truth is that Ireland has turned itself into a parasite on the global economy – and sooner or later it will quite rightly face a clampdown.
[Chomsky agrees](https://www.irishtimes.com/culture/noam-chomsky-ireland-has-robbed-poor-working-people-of-tens-of-trillions-of-dollars-1.4697373)
The telegraph would be regarded in Britain and Ireland as a shit rag that platformed for Brexit
Lol The Telegraph really? That’s not a news source really, more like the printed version of 4chan 😂
The irony coming from a nation that built its wealth from stealing it from other countries including Ireland
Ireland can afford a sovereign wealth fund now so they might as well increase taxes to a normal level and not let big tech to profit to a ridiculous degree.
Pot calling the kettle black here.
Wasn’t the brexiters plan to just turn the whole of uk into a tax haven?
This is just the Brits at it again.
An allumnus of Balliol College would know all about freeloading, in fairness.
Written by a brexiteer who advocated to abolish corporation tax.
Please don’t post Tan propaganda here. They’re just angry they’ve become an irrelevant country.
Can you guess where multinationals send their money?
British Overseas Territories.
Salty Brexit bois throwing digs at Ireland.
The same people who wanted to cut corporate tax…
Not our fault ye fools voted to leave the EU without any real plans and wanted to remain part of the EU market. Ye screwed the pooch don’t be throwing digs at us.
I was against the low corporate tax rate but when you think about it for a minute and realise Hungary has a much lower corporate tax… mustn’t just be the taxation at work!
As an Irishman who has been decrying our tax haven status since the early Noughties, it still really sucks to find myself agreeing with anything in The Telegraph. Broken clocks and all that. Frankly I look forward to seeing what we as a nation can do when we’re not bending over backwards to pleasure as many multinationals as possible. Enough pick-me bullshit, time to invest holistically at home.
Everyone raising taxes
People and companies leave
Picachu face :0
Inevitable. It erodes everyone’s tax bases. It is different to the UK situation, doesn’t function the same way. But yes we have tax havens and I should imagine they will be finished off too at some point. And yes, there are some UK people who want to replicate it. It’s obvious some people didn’t read past the title because the author even says that himself. I don’t know why this discussion had to become a UK vs ROI thing, again…
Since Ireland came in to being it has never found a niche in the global marketplace to fill.
It’s entire economic fortune consists of undercutting what London does.
Ireland’s time is likely up simply because the EU cannot leave anything alone.
This is hilarious… British media is very mad re Irelands stance on Palestine.
Ireland has done more damage to it’s western ‘allies’ this century than China, Russia or any Islamic terrorist boogeyman. Quote simply Ireland should be bombed into the ground for starving Western democracies of desperately needed tax revenue, which is causing unsustainable debt, crumbling public services/infrastructure, and the unfair burden of overtaxation of the middle/working class.
The absolute irony of Britain, historically one of the most rapacious nations on the planet, complaining about their former colony “poaching” wealth with tax laws that comply with EU regulations.
Not to mention that British Crown Dependencies such as Cayman Islands and Jersey are literal tax havens themselves
Ireland is trying to be Switzerland it feels like. Act neutral on international affairs but take everyone’s money and support the bad guys when they can.
There should be minimum company tax in the EU. Ireland is pretty much like the Swiss. They drain the wealth of other nations while playing neutral and innocent.
Hahahahahahaha those poor deluded English people
Gah. Telegraph shit article and I clicked it.
Never post from this rag again.
Lmao
We should all be in favor of eliminating tax havens within the EU. Ireland, Netherlands,Switzerland, Malta, Monaco, Luxemburg, Cyprus all of these countries need to stop. The Eurozone needs to have tax rules that are applied across the board. We can not have single countries antagonizing the fiscal policy of the whole block for a short profit.
Brits are salty because the Irish beat them at their own game, but the need for destroying these fiscal paradises remains.
I think the telegraph has a crush on Ireland, they way they keep badmouthing them
Tax the shit out of them.
Ah, The Torygraph strikes again.
Serbs and Magyars will not be allowed to ride on cheap Orc gas too after the Bulgaria finally started to tax them.
The whataboutism in this thread is on a whole new level.
Brits will never not be mad that Ireland is a now a richer country than the UK. Malt and seethe.
Yeah just look at OP’s post and comment history guys. Guys a nutter.
Matthew Lynn before Brexit: “The UK should abolish corporation tax”.
Matthew Lynn and other Brexiteers after Brexit sitting in a pile of shite entirely of their own making: “Ireland is a parasite with their low corporation tax”.
Looks like someone is jealous
They Hate Us Cuz They Anus. Ireland is arguably the best country to live in the world, and this was achieved without having any resources like oil or being a colonist.
hahaha another british hit piece. Times don’t really change around these parts. The core of this is that the Irish economy is now more attractive than the UK because of their newly found isolationism. Stupidity on a national scale.
Jealousy doesn’t suit you UK