Ireland’s failed business model

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The Irish Times notes:

About 20 multinational companies have relocated their corporate headquarters to Ireland over the past year because they are able to pay “little or no tax” here, according to the Revenue Commissioners.

The firms, which are mostly US- and UK-owned, have been moving their main holding companies away from places like Bermuda and the Cayman Islands because of plans by a number of governments to clamp down on tax havens.

Internal briefing material drawn up by Revenue officials shows there has been a significant rise in firms transferring the residence of their main holding companies to Ireland or considering doing so. The very limited amount of tax paid by some of these firms indicates they do not have any meaningful presence here in terms of investment or jobs.

So Ireland is a classic tax haven, although (I accept) not always a perfect secrecy jurisdiction* for a parent company (it’s different for subsidiaries, where it’s a classic secrecy jurisdiction).

But why is it doing this? The whole logic of its tax structure was to bring work to Ireland. But now it offers companies what is, in effect a zero tax environment and asks for no jobs in exchange.

The net contribution of this policy to Ireland is tantamount to nothing.

The cost to the world is considerable.

Why in that case is it doing it? Isn’t this neo-liberal dogma gone mad? And the myth of the Celtic Tiger considerably outliving its usefulness?

There’s little chance of Ireland recovering until this tax policy is changed. All it’s doing now is contributing to a hollowed out economy - and that's a disaster for Ireland and the rest of us.

* Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain that is designed to undermine the legislation or regulation of another jurisdiction. They do in addition create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.

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