Well, they are not sustainable, but Ireland no longer relies on them, so it's a moot point. The policies enabled the rapid development over a 25 year period and as the country became richer and the progress became self-sustaining, the arrangements were discontinued.
For example, the "Double Irish" arrangement, which is the subject of this case, was only in use up to 2014 (and was modelled on and often paired with the "Dutch Sandwich" BEPS arrangement, so you should note that Ireland wasn't the only EU country playing these games). It was this case that closed the Double Irish arrangement and while "Green Jersey"/CAIA partially took it's place, the legitimate tax take was already more than sustainable.
Now that Ireland has agreed to a global minimum corporate tax (CT) rate, it's likely that the CT take in Ireland will fall over time, but the inflated CT take of recent years has been treated as a windfall and not current income.
> If Ireland has closed all the loopholes then why do the phantom exports (US subsidiary buying IPs) account for 38% of total exports of this year?
I didn't say they have closed all the loopholes (nor have other EU countries). What I said was that Ireland is no longer reliant on them, in that the country does not fund current expenditure from the CT take. They are openly viewed as windfalls.
> Provided that they dont find another loophole.
It may happen, but one thing's for sure, Ireland won't be alone.
Thank you for sharing an article supporting my comments. From the article, which outlines the stance of the Department and Minister for Finance:
> Corporation tax growth has been a key support to the exchequer in recent years, though the Department of Finance has consistently said that much of the increase cannot be relied upon as it does not directly relate to economic activity undertaken in Ireland and was thus windfall in nature.
> It warned that the latest figures, which showed a decline greater than officials had anticipated to a monthly corporation tax payment of €1.7 billion, underlined that this source of revenue was potentially subject to " exceptional volatility”.
As stated many times now, the exceptional CT take is seen as a windfall and the State does not rely upon it for current expenditure.
Honestly, I think you've made up your mind that Ireland==bad and no amount of data or critical reasoning will change your mind. May I suggest travel? You will quickly learn that Ireland is not a poor, bad, or corrupt country.
Edit: Okay, having read the parent commenter's replies, they seem to be commenting in bad faith. To anyone reading along, I recommend you read the OP and shared articles.
> Thanks for sharing an article supporting my comments
No it does not. It’s saying that the corporate taxes are volatile and “should” not be relied upon, hence the cautionary tone of the article.
Edit: From the same article
> Peter Vale, a tax partner at Grant Thornton, warned that the figures were “surprisingly poor” and indicated that “the risk of weaker corporation tax receipts in the key month of November increases. Poor November figures could erode much of the planned budget surplus.”
>Well, they are not sustainable, but Ireland no longer relies on them, so it's a moot point.
Not true. Foreign companies are 80% of Irish corporation tax, 25% of Irish labour, 25 of top 50 Irish firms, and 57% of Irish value-add.
>For example, the "Double Irish" arrangement, which is the subject of this case, was only in use up to 2014 (and was modelled on and often paired with the "Dutch Sandwich" BEPS arrangement, so you should note that Ireland wasn't the only EU country playing these games).
The Double Irish was immediately replaced by the Single Malt and the Irish tax regime has started to add more traditional tools to tax evasion (e.g. QIAIF, L–QIAIF, and ICAV).
> Not true. Foreign companies are 80% of Irish corporation tax, 25% of Irish labour, 25 of top 50 Irish firms, and 57% of Irish value-add.
This isn't a rebuttal. Ireland is absolutely dependent on foreign firms, but no longer dependent on the inflated CT take from BEPS schemes. The majority of the above is now genuine work undertaken in Ireland, not IP tax avoidance schemes.
> The Double Irish was immediately replaced by the Single Malt and the Irish tax regime has started to add more traditional tools to tax evasion (e.g. QIAIF, L–QIAIF, and ICAV).
Yes, agreed (although Ireland is not alone in this, even in the EU). However, that doesn't change the fact that Ireland is no dependent on this tax income.
Given your apparent knowledge of the schemes involved, this should be clear to you?
For example, the "Double Irish" arrangement, which is the subject of this case, was only in use up to 2014 (and was modelled on and often paired with the "Dutch Sandwich" BEPS arrangement, so you should note that Ireland wasn't the only EU country playing these games). It was this case that closed the Double Irish arrangement and while "Green Jersey"/CAIA partially took it's place, the legitimate tax take was already more than sustainable.
Now that Ireland has agreed to a global minimum corporate tax (CT) rate, it's likely that the CT take in Ireland will fall over time, but the inflated CT take of recent years has been treated as a windfall and not current income.