Tag: Bono

No more pot of gold at end of Irish rainbow

irelandThe days of Apple and Google screwing over European and American tax authorities by having an Irish base is likely to become a thing of the past.

Ireland’s Ministry of Finance announced that Ireland will phase out its controversial tax scheme known as the “Double Irish,” which lets companies, especially tech companies, drastically reduce their overseas tax burden.

Irish Finance Minister Michael Noonan said in a statement accompanying the government’s new 2015 budget that he was abolishing the ability of companies to use the ‘Double Irish’ by changing our residency rules to require all companies registered in Ireland to also be tax resident.

This change will take effect from the 1st of January 2015 for new companies. For existing companies, there will be provision for a transition period until the end of 2020.

So, in other words, Apple and Google will be able to save money for at least six years.

Firms that take advantage of this arrangement include Apple, Amazon, Adobe, Microsoft, and Google. It is unlikely that they will move their EU operations away from Ireland as the corporation tax rate in that country is extremely low.

Google declared $60 billion worth of revenue in the United States in 2013. Google’s effective tax rate in the United States has fallen dramatically from 21 percent to 15.7 percent in recent years as the company has broadened its use of overseas tax benefits.

It is starting to look like the Irish government was getting a little jittery about an EU investigation into the scheme. Over the last year, various European countries, including the United Kingdom, the Netherlands, and France, have been reviewing their laws that enable this type of corporate behaviour.

Noonan is going against  U2’s Bono, the Irish icon, who claimed that the fact that Apple’s cheating of the tax payer in the US and EU somehow assisted Irish poor. To be fair Bono owes Apple a favour – Jobs’ Mob forced Apple fans to listen to U2’s latest album by hard wiring it into the latest iPhone 6, until it had enough complaints to issue a fix for the problem.

Bono sells Robin Hood image to defend Apple

bono-cash-facebookSuddenly it is hard to use the words “credibility” and “Bono” in the same sentence.

The U2 popular beat combo  artist  has done his best to champion all the right causes over the years. He has been a significant leader in the fight against poverty, and has helped to create the ONE CampaignDATA(RED) and EDUN, a clothing company which is striving to stimulate trade with poverty stricken countries. He has been nominated for the Nobel Peace prize three times for his efforts to help the poor.

This is why the U2 frontman stepping in to defend Apple’s method of screwing up the tax system of Europe is particularly hypocritical and nasty.

Bono is currently in a business partnership with Jobs’ Mob so having him stand up this weekend and defend Apple’s right to save a bob or two by shafting the health and welfare policies of the EU damaged any lefty street cred that the former 80s rocker might have had.

The U2 frontman believes large companies that avoid paying billions in taxes bring prosperity, rather than harm the economic growth of the country. Unfortunately, Bono, they do not.

Apple has paid an average tax rate of 2.5 percent over the past five years, despite turning over a profit of around $109 billion. This is a fraction of Ireland’s standard tax rate of 12.5 percent.

While Ireland was busy making its deals with big technology companies like Apple to act as a tax haven, the country was going through its biggest debt crisis ever. Apple might have provided jobs in Ireland, but its impact on the Irish economy has been minimal.

Bono said that Ireland was a tiny little country, which did not have scale, and our version of scale is to be innovative and to be clever, and tax competitiveness has brought our country the only prosperity we’ve known.

“We don’t have natural resources; we have to be able to attract people.”

Because of its generous tax allowances, he added, Ireland has reaped the benefits of “more hospitals and firemen and teachers because of the tax policies.”

Now this is a bit of rubbish from the bloke who was nominated for a Nobel Peace Prize in 2003 for his campaign to alleviate world debt. Tax avoidance schemes rarely help the economies of any nation and take away cash from countries that need the cash.

Ireland might not have attracted the likes of Jobs’ Mob, or Google, or other tax avoiders, but it would have had a fair taxation system. The other countries in the EU which Apple was avoiding paying tax would be able to afford betters health care standards, teachers and firemen.