Tax Research UK

irishtimes.com - Top Irish businessman rails at ‘intertwining with politics’ - Sat, Mar 06, 2010.

Fascinating opinion from the Irish Times on Saturday:

ONE OF Ireland’s most successful businessmen, Niall Fitzgerald, has told The Irish Times he did not feel that he could have pursued a business career in Ireland without compromising his personal principles.

Mr Fitzgerald left Ireland in 1970 and went on to become chairman and chief executive of the giant conglomerate Unilever and chairman of the global media agency Reuters.

In an interview published today, Mr Fitzgerald suggests that “many people in domestic Irish business succeeded because they were intertwined with politics” and that “unless I was prepared to engage more directly with politicians . . . and at some point be ready to compromise on my own principles, that that would restrict my abilities to develop a business career in Ireland”.

Mr Fitzgerald is critical of what he calls the “claustrophobia” of Irish business. He says “that very intimacy, the knowledge that you can take one small envelope and write all the names that matter on the back of it” militated against independent jjudgment and high ethical standards, contributing to the current crisis in the Irish economy.

Recalling a dinner last summer with friends who had served on the boards of Irish banks, Mr Fitzgerald (himself a director of Bank of Ireland during the 1990s) says he posed a question: Were they aware of the risks that were being taken and thus “complicit with the recklessness”? Or were they unaware of what was going on and thus failing to discharge their responsibilities as directors? The question, he says, prompted a “very ferocious conversation”.

Mr Fitzgerald is also critical of the argument that banks must continue to pay very high salaries to retain senior managers. “You mean, these terribly valuable people who either didn’t understand the risks they were running or understood them and continued anyway without thought for the consequences? You know what? I could do without those valuable people.”

He also criticises high-level business people and bankers who are going into exile in tax havens such as Switzerland. He is, he says, “deeply sad” that some seem obsessed with “how you avoid at almost any cost to yourself and your family being a supportive member of the wider society in which you live”.

Mr Fitzgerald expresses concerns about the ability of those in positions of power to take responsibility for what has happened. “If the leaders of a society are not prepared to hold themselves accountable or there are not the institutions which are sufficiently independent to hold them accountable, then I think you have a very serious problem on your hands.”

Apologies to the Irish Times for quoting this at length - but the opinions expressed are important, relevant and ask pertinent questions of both business and politicians.

Cleaning up the act is an essential part of reform now.

Without that change cannot happen in Ireland or anywhere else.

Richard Murphy Economics, Ethics, Ireland

Ireland’s suffering offers a glimpse of Britain’s future under the Tories | Business | guardian.co.uk .

Larry Elliott on the carnage that’s been unleashed on Ireland and which the Tories would create here.

Richard Murphy Ireland

Weapons firms run for cover in Ireland to avoid paying tax.

The Sunday Tribune in Ireland has reported:

FIVE of the world’s leading weapons manufacturers have based multi-billion-euro companies in Ireland in order to avoid tax.

Despite the size of these Irish-based operations, which in 2008 alone had a total of €6.34bn on their books, they have just two employees registered in Ireland.

A Sunday Tribune investigation has found that in the same year the companies had a combined turnover of €724.7m with profits amounting to €387m, but paid less than €375,000 to the Irish state, an effective tax rate of 0.09%.

This is yet another example of the degradation of international taxation and regulation Ireland is facilitating whilst its own economy sinks into chaos.

Richard Murphy Ireland

Finance jobs, banking jobs, recruitment in investment banking & in the financial markets.

eFinancial Careers in Ireland has said:

Ireland is benefiting from a raft of international insurance and re-insurance firms moving their legal domicile to a new low-tax home. However, to suggest that we’re about to see a slew of recruitment as a result may be slightly in the realms of fantasy.

So far this year, XL Capital unveiled plans to re-domesticate itself to Ireland from the Cayman Islands, Zurich Insurance transferred continental insurance portfolios here and Willis Group has completed the move of its corporate domicile from Bermuda.

This is due to a combination of Ireland’s low corporation tax, the US’s crackdown on tax havens, and – as some firms have suggested – the concentration of skilled insurance personnel here.

We could therefore assume that hiring is likely to swiftly follow, but recruiters suggest it would be unwise to hold your breath for this.

Paul Cotter, director of insurance-focused recruiters Cotter Personnel in Dublin, says: “We’ve seen very little hiring from the international insurance firms that moved here in the last six months. They’re small operations and many bring key people with them – I’d say it’ll be the summer at the earliest before we see any recruitment.”

Let me then suggest that those recruited will be a secretary, a security guy or two, and a couple of janitors, all of them hired to make it  look as though there is a corporate presence in Ireland when there will in fact be none.

Ireland offers an internationally abusive tax system that fails to tax international income. It did so to appropriate tax revenue to itself and promote domestic employment. The trouble is it now neither raises revenue for Ireland or create domestic employment. It’s just internationally abusive.

Ireland is now being taken for a ride. It’s time it realised before it ends up on the short lists itself.

Richard Murphy Ireland

New AIB boss backed secret tax haven plan - Irish, Business - Independent.ie.

Colm Doherty, the newly appointed managing director of AIB [formerly Allied Irish banks - now heavily supported by the Irish State], was one of the supporters of a controversial investment scheme to allow the bank to circumvent rules preventing AIB from buying and selling its own shares.

Mr Doherty was head of the key AIB capital markets division at the time that the investment scheme was adopted by AIB. He was one of the executives who persuaded AIB’s top brass to go ahead with the project.

The scheme, devised in 2001 by AIB’s wholly owned subsidiary Goodbody Stockbrokers, involved AIB using obscure tax havens with strong secrecy rules. The locations used in the scheme included well-known tax havens, namely the Caribbean island of Nevis and the Isle of Man.

At the time, Nevis was named by the Financial Action Task Force as one of the 10 tax havens in the world, actively promoting money laundering and was blacklisted by some regulators.

At a meeting of top executives in 2001, Mr Doherty proposed the plan. It was then referred to the full AIB board audit committee, which in turn gave it the go-ahead.

We conme back to the same isues time and time again.

Corruption, including blatant breaches of fianncial regualtion using he crecy provided by places like the Isle of Man.

And the fact that nothing appears to have been learned. Those who perpetrated the abuse are still getting away with it.

When will we clear out the Augean stables?

Richard Murphy Banking, Ireland

Aviva consolidation ‘not just for tax’ - The Irish Times - Fri, Oct 23, 2009.

Subject to regulatory approval, Aviva plans to establish a single European holding company in Ireland, to be named Aviva Europe General Insurance.

Mr Purdy said the decision was taken on the basis of streamlining and improving the services available to European customers.

He said Aviva believed that it was unlikely to generate ill sentiment in European countries that may potentially lose out on tax income should the planned integration take place.

Oh yes it will.

Richard Murphy Ireland

FT.com / Companies / Insurance - Willis latest to leave low-tax Bermuda.

Willis, the world’s third-largest insurance broker, plans to move its global headquarters from Bermuda to the Irish Republic, becoming the latest in a string of multinational companies to leave the low-tax Caribbean island.

The company said Dublin provided “a more stable environment” and would improve Willis’s ability to “maintain a competitive worldwide effective corporate tax rate”.

Willis follows Accenture, the consulting group, and about 10 others in announcing a move away from Bermuda since Barack Obama became US president and began to take a much tougher line on tax havens , saying their widespread use by American businesses was “the biggest tax scam in the world”.

The moral is clear: now we have to stop Irish abuse as well.

Richard Murphy Ireland, Secrecy jurisdictions

FT.com / Europe - Resignations hit Irish government majority.

Ireland got into its current staggering mess by promoting a banking model that has for all practical purposes failed and an economy built on the myth of economic activity which was just a giant tax scam.

The model that got it into the mess has failed.

Now it’s pionerring the deep cuts model of getting out of the mess. And that’s failing too:

The Irish government may have to rely on the vote of the speaker to secure key legislation after two backbench members of the populist Fianna Fáil party resigned the whip in a dispute over health cuts.

The resignations of Jimmy Devins, a former junior health minister, and Eamon Scanlon represent the first sign of backbench unease over budget cuts as Dublin seeks to stabilise public finances and rescue the stricken economy.

Ministers on Thursday played down any difficulties the defections may create in pushing through vital legislation in the next few months. But one more defection would leave Brian Cowen, the prime minister, leading a minority government.

Mr Cowen on Thursday made clear he expected both parliamentarians to vote with the government on key issues, saying he hoped “in the current economic circumstances they will be in a position to continue to support the government”.

However, Mr Devins said he would “look at every vote on its merits”.

The closure of breast cancer facilities in his Sligo constituency, which took place on Wednesday, has been a hot local issue for more than a year. Some campaigners against the health cuts dismissed the politicians’ moves as an attempt to protect their seats should a general election be called before 2011.

Nonetheless the defections are further evidence of the faltering discipline inside Fianna Fáil.

That’s not faltering discipline: that’s profound disquiet with the new prescription from the failed neo-liberal economic model that puts all the pain of the failure onto Irish people and perpetuates the corporate tax abuse that undermines Europe’s tax system and fails to deliver thereturn the Irish people should expect from capital.

The same will happen here when the Tories try to cut: it just won’t be possible because people won’t have it, even if they’re conned into voting for it.

Have no doubt: politically we’re in for a rough ride and the Left will win in the end - because people want what only the state can provide.

Richard Murphy Conservatives, Economics, Ireland

FT.com / Lex / Financial services & property - Ireland’s bad banks.

The Irish government has outlined a scheme for its bad bank agency

Wouldn’t it just be easier to call that the Irish banking system?

Richard Murphy Banking, Ireland

The Wall Street Journal has reported:

Accenture is seeking to become the latest company to switch tax-haven locales.

On Tuesday, the consulting and outsourcing firm said its board of directors had unanimously approved switching the company’s place of incorporation from Bermuda to Ireland.

The move is, of course, provoked by Obama’s attack on tax havens from the USA.

Time we did the same on Ireland from the UK and EU, I suggest.

Ireland is promoting tax abuse through the artificial relocation of profits. And it allows the fact to be hidden on publiuc record.

Time to call game over on this abuse, now. That way exploitative organisations that use these places would have nowhere left to hide. Which is exactly what is necessary in an era of accountability and transparency.

Richard Murphy Ireland, Secrecy jurisdictions, Tax Havens, Tax avoidance