Lloyds Banking Share Discussion Threads

[xxxxxy] 06/6/2021 16:29

make multinational companies pay more tax and change how they make payments.Here we explain what was agreed and the possible consequences for Ireland.What has the G7 agreed ?The finance ministers from the big advanced economies have supported a deal to reform the way multinationals are taxed.This has been under discussion among the 139 countries within the OECD for the past few years, with a view to reaching a deal this year.The proposed deal has two main parts .First it would mean the biggest multinationals would pay some tax where they sold their services and not just where they have their headquarters. This is a fundamental change in how tax is paid, and will give taxing rights to countries in which the largest multinationals make sales on 20 per cent of their profits, once the margin exceeds a minimum level.Secondly there is a proposed global minimum tax rate which would apply to multinationals of "at least" 15 per cent . Again, this is a major reform,which – if the US gets its way – will be accompanied by measures to put pressure on countries to comply.Countries would be free to charge a higher rate - but under the deal a recommended minimum would be set.So what happens next, will there be an OECD tax deal?It looks likely. The big players usually get their way and the US is pushing hard for a deal.The proposals will be discussed at a wider group of the so-called G20 countries in Venice in July and then among all OECD countries. There is a lot of detail still to be agreed, and this deal is not yet "done." But agreement now looks more likely .Why is what happened today significant?If adopted, it would be the biggest shake-up in corporation tax in years. It would change where and how companies are taxed, and also recommend a minimum worldwide rate.This is in response to the details which have emerged in the past decade on the scale of global corporate tax avoidance.And as well as how much tax companies pay, it is also about where they pay it, with exchequers needing cash after the pandemic.RelatedEurope hails 'tax revolution' after G7 seals deal on 15% rateBritish finance minister - G7 tax agreement provides level playing fieldGlobal tax rate: Ireland could lose €2bn a year under proposed reforms, says DonohoeWhat does it mean for Ireland?First, a deal means less corporate tax revenue. Many big multinationals have their international headquarters in Ireland from where they sell in the EU and around the world.In future, the countries they sell in to will have the right to raise a tax based on their sales in that market. This is a departure from the normal practice of taxing profits.And because the big companies will pay more tax in big consumer markets, they will pay less in Ireland.The Department of Finance has tentatively estimated that this could cost the Irish exchequer more than €2 billion, out of annual corporate tax revenues of close to €12 billion. Following the meeting Minister for Finance, Paschal Donohoe, mentioned a figure of €2.2 billion plus. It is hard to be precise, but tax experts agree that it could be in this ballpark.Second, Ireland would have to decide how to respond to the new global minimum, which may now be 15 per cent, even if some EU members states like France will continue to push for higher.This will be a recommended rate – so Ireland could decide to retain the 12.5 per cent rate. This will be a big call and will also be influenced by what happens in the US, where the Biden administration is trying to put in place a new international minimum tax rate for US companies and is now discussing this with Congress. Congress would also have to approve aspects of the OECD deal.If Ireland retained its 12.5 per cent rate and other counties – particularly the US – tax international earnings at a higher rate, then companies with operations here could face a top-up tax payment in their home market in addition to what they pay here. Also, under OECD proposals referred to by US Treasury Secretary, Janet Yellen,there is a backstop which could in some cases deny tax credits to companies in countries not applying the minimum. These measures would " essentially put pressure" on countries to apply the minimum rate, she said.If Ireland increased its rate to the new global minimum it could provide additional revenue to compensate for that lose under the other part of the OECD plan. Ireland will wait to see what happens next at the OECD and US.What will Ireland's position be?Minister Donohoe has argued that smaller countries which do not benefit from big domestic markets should be allowed to compete for investment using low corporate tax rates, such as Ireland's 12.5 per cent.However the big countries argue that tax competition needs to stop, as it has been used by multinationals to cut their overall tax bill.In a tweet after the meeting Mr Donohoe said any deal would have to suit big and small countries and he said subsequently he would continue to make the case for the Ireland's 12.5 per cent rate.If an OECD deal is agreed, Ireland will come under pressure to adopt the new global minimum rate.Vital to this will be what happens in the EU.The European Commission and the bigger countries would be likely to try to mandate that the minimum rate would be the lowest which would apply across the EU. France has said Ireland should " fall into line."Ireland could have support from other countries, like Hungary, in resisting this.However, the Government would have to decide whether this is a fight it wants to have, and in particularly what the implications are for the country's international reputation.What might this mean for Ireland's economy?First, corporation tax revenue will be lower. The detail remains to be thrashed out and will be important.Second, the strategy of using tax as a tool to attract companies to invest in Ireland will become largely redundant. This is the more significant factor in the longer term.Companies invest in Ireland for a range of reasons – the skill base and access to EU markets are also important. And many big players are long-established here – and will stay.But investment flows will be affected, particularly in areas where tax plays a key role in decision-making and over time some operations could return to the US from countries like Ireland.And while big US companies will continue to invest around the world, in the longer-term the push to invest overseas as part of a strategy to save tax will be no more.Meanwhile more aggressive tax structures are being closed off.This will put pressure on Ireland to improve the rest of its offering to multinationals – in areas such as infrastructure, supports for research, a skilled and educated workforce.... Cliff Taylor.... The Irish Times

[asa8] 06/6/2021 16:26

Arja why don’t you hire a boat and go to Calais then bring the migrants back to stop at yours

[minerve 2] 06/6/2021 15:58

"it is all about distance you little Englander !"

We are going to sell 'virtual' pork pies, didn't you know.

😂😂😂😂8514;😂ԅ14;

Just popping down to the Tuvalu convenience store to buy some chocolate before the match.

[arja] 06/6/2021 15:52

grahamite,
A pity you have not got enough intelligence to see that trading with the EU is far
better and easier than trading with Australia . it is all about distance you little
Englander !

[arja] 06/6/2021 15:45

even Theresa May joined protest group of Tories against cut in foreign aid budget !
This woman is devoid of an ounce of compassion or empathy but her priest at church must have tried to convert her and partially succeeded .

[freddie01] 06/6/2021 12:39

Jefferson
@Jefferson_MFG
·
Jun 4
Great week:
Kraft Heinz: £140m investment
Airbus: New £40m facility
Lotus: £100m investment
Etex: New £140m factory
Nissan: £52m investment
SAICA: New £50m factory
Dairy Partners: £15m factory
GE: New blade factory, 750 jobs
[...] #UKmfgFlag of United Kingdom

[freddie01] 06/6/2021 12:39

Jefferson
@Jefferson_MFG
·
Jun 5
We only post and share POSITIVE British manufacturing news. If you prefer negative news, please follow the BBC! #UKmfgFlag of United Kingdom

[xxxxxy] 06/6/2021 12:35

GB News....https://www.google.com/amp/s/inews.co.uk/news/uk/gb-news-launch-date-tv-channel-andrew-neil-new-when-start-latest-news-947550/amp

[sentimental rules] 06/6/2021 10:02

Is arja black or white