Ireland – Sic Transit gloria

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It looks like Microsoft's love affair with Ireland is fleeting. According to the Irish Independent (behind a registration wall) in the past two years Microsoft's Irish subsidiary has paid dividends totalling €5bn to its Seattle-based parent. That's despite making profits less than that at €2bn pre tax a year. The tax charge is running at about 10%.

The profits booked are of course illusory. Out of turnover of €9.5bn last year almost €6.7bn was generated in Continental Europe, with the UK accounting for €1.7bn in revenues. Which gives clear indication as to where tax should have been paid in my opinion.

Even so, this is not enough for Microsoft. According to the Irish Independent:

Microsoft Ireland's managing director Joe Macri has warned that Ireland will cease to be an attractive location for foreign direct investment (FDI) if employment and other costs here continue to rise

It's not enough then for a state to sell it's tax system to foreign corporations: it's population must not benefit from increased prosperity as a result either.

It looks like Ireland's days as the Celtic Tiger will soon be over - proving that they never were anything but a tax bubble anyway.