[pekko]

And, thankfully, EU has regulations against such schemes. We can have international treaties and organisations to prevent cases of tradegy of commons.

For example, EU forces Ireland to collect taxes from Apple, because it deemed such rebates to be illegal state aid. See https://en.wikipedia.org/wiki/EU_illegal_State_aid_case_agai...

[asdfasgasdgasdg]

They did not force them to raise their tax rate though, so it is still highly beneficial to Apple to be in Ireland compared to, say, France.

What member countries really should do is similar to the revenue tax that was recently proposed. But not exactly, because that's a pretty blunt tool. Instead, the calculation should go something like this.

    # Exclude payments to/from subsidiaries.
    global_revenue = all external revenue
    global_expenses = all external non-tax costs
    global_profit = global_revenue - global_expenses
    global_tax = this_country_tax_rate * global_profit
    country_tax = this_country_revenue / global_revenue 
                  * global_tax

The goal being to remove the benefit of tax avoiding schemes like Ireland. It doesn't matter how you move the money around, you'll pay taxes to this country based on how much money you make here.

Require the company to estimate and pay this tax quarterly, and provide reasonable fines for underpayment. Granted the first two lines might be difficult to compute, so you would only do this for companies big enough to be worth going through the trouble for.

Disclaimer: not a tax policy expert. Would love to be corrected. Please poke holes.

[matt4077]

While their rates are low, the issue was about additional, individual deals that lead to effective tax rates around .5% (instead of the official 12.5%, I believe).

I think the EU has done a pretty good job to find a balance here: when Ireland joined the EU in the 70s, it was among the poorest countries west of Moscow and north of Morocco. It became one of the largest recipients of net transfers over the next 30 years, but everyone knew that their chances of catching up required some economic competitiveness, and that it would take decades to pull even in terms of "Features" (infrastructure, local market etc)

Low taxes were therefore the only viable path to attract investments. That scenario is explicitly accepted even among those advocating for coordinated taxation.

In the case of Ireland, everything actually worked out extremely well: Speaking something almost resembling the english language, and having the strength of character to make peace with the English, Ireland established world-class universities and a rather remarkable knowledge economy in just one generation.

[asdfasgasdgasdg]

Sure. But are these subsidies still needed? In any case, my proposal was more along the lines of an approach to unilaterally prevent companies from benefiting from off-shoring tax schemes, under the assumption you want to do that. The thing I want holes poked in is the scheme itself, since I'm taking as given that some people want to institute a scheme with this goal.

[atq2119]

> Speaking something almost resembling the english language,

Dude... not cool.

[briandear]

Why should the EU care? It seems like these rules exist in order to effectively subsidize more expensive governments. If France did what Ireland did, France would collapse under its own weight, so the EU uses these rules to protect less competitive member countries. So the EU pushes things like minimum tax rates rather than alternatively pushing maximum tax rates. If an EU country proposed a 50% corporate tax, the EU would be ok with that, but if a member proposed a 2% taxe, the EU would lose their mind.