Author: Seamus Coffey

BEPS progress by the OECD

The OECD’s unit working on the Base Erosion and Profit Shifting (BEPS) project have been releasing documents based on the points in the Action Plan published last year.  The full set is here.

Yesterday, a discussion document for Action Point 1: Taxing the Digital Economy was published.  It is a very wide-ranging document.  One of the notable suggestions are the proposals to allow/force the greater taxation of companies selling digital products in their “market jurisdictions”.  This primarily arises from the ability of such companies to circumvent the existing rules on permanent establishment because of the intangible nature of the product.

The proposal is not a move to formulary apportionment. The document puts forward proposals to alter the existing source principle of corporation tax to try and ensure that more/some of the profits earned by these companies are attributed to the country of their customers using changes to PE rules.  Other proposals include the new concept of a “virtual” permanent establishment, the creation of a withholding tax on digital transactions and the use of consumption tax options.

There is a lot in the document and some extracts summarising the problems the OECD group are trying to tackle in this area are below the fold.  Whether there will be any effective solutions by the end of the process remains to be seen.

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Forfás: Survey of Economic Impact

The 2012 release of the Annual Business Survey of Economic Impact is available here.

The coverage is obviously not as broad as the various equivalent figures provided by the CSO.  The Forfás survey is limited to “client” companies with ten employees or more but a benefit of the survey is that the indicators surveyed are decomposed by company ownership.

 

Abolish Income Tax

… and use USC instead. Reported by The Irish Times here.  The full text of Tom Healy’s address is here.

Raking Over Old Coals

A memo prepared in November 2008 by Merrill Lynch in advising the then government on the developing banking crisis has been released following an FOI request from Sinn Féin.  The 45-page memo is here.

Some government statements issued around time include:

  • 30.11.08: Announcement in relation to Covered Institutions
  • 14.12.08: Statement by the Government on the Recapitalisation of Credit Institutions
  • 21.12.08: Government Announcement on Recapitalisation
  • 15.01.09: Statement on Nationalisation of Anglo Irish Bank

It is an interesting read but has anything been unearthed aside from further evidence that the scale of the banking bust was massively underestimated?

No tax anywhere

Pascal Saint-Amans restates the OECD intention to tackle double non-taxation in this follow-up piece to the taxation of MNCs in the Australian Financial Review.

“The current rules legally facilitate the location of the profit in non-tax jurisdictions. In other words you can develop schemes that can put your intangibles in Singapore or Switzerland or Luxembourg while there is no activity there. You can deduct your expenses in Australia. You can put your intangibles in Singapore – where it is not taxed. You can lend money to your subsidiaries across the world so that you can erase profit in all these countries because there is excessive interest, then you locate a treasury centre in Ireland for there is no tax either. At the end of the day there is no tax anywhere.”