Ireland and UK GDP

Z

zzzzz

Well-known member
After seeing an interview with an Irish politician expressing serious concern over a no-deal Brexit and the effect on their economy I checked their GDP per Capita in comparison to ours.

Ireland $78661 and the UK $42300

I was astonished tbh. Why is their GDP nearly double ours?
 
zzzzz said:
After seeing an interview with an Irish politician expressing serious concern over a no-deal Brexit and the effect on their economy I checked their GDP per Capita in comparison to ours.

Ireland $78661 and the UK $42300

I was astonished tbh. Why is their GDP nearly double ours?
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If you're referring to GDP per capita then Ireland's is 2nd highest in Europe after Luxembourg and one ahead of Switzerland. UK is 14th, just below the EU average. It will almost certainly drop after Brexit.
 
The main reason for the particularly high Irish GDP growth rates lies in the fact that in recent years, attracted in large part by low corporation tax rates, a number of large multinational corporations have relocated their economic activities, and more specifically their underlying intellectual property, to Ireland.

from the OECD

google this ... oecd irish gdp up by 26.3 pdf .... takes you to the OECD report. I can't post the link ...
 
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Ah....... so while the GDP per Capita sits within the mega international corporations the Irish themselves as individuals aren't particularly any better off than us? So why have the multicorps there?
 
zzzzz said:
Ah....... so while the GDP per Capita sits within the mega international corporations the Irish themselves as individuals aren't particularly any better off than us? So why have the multicorps there?
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maybe somewhere here knows more about tax but corporate tax is relatively low, favourable tax treatment of intellectual property etc. Basically it is a form of tax haven in the EU.
 
Apple did a deal with the ROI Government so that they woiuld pay only 2% (I think) corporation tax on Apple's profits from all its EU operations by chanelling all its EU generated revenue into Ireland.

I believe Amazon did the same with Luxembourg.

It was one reason why I was getting sick of the EU. It was allowing large International companies to avoid massive amounts of tax, especially when poverty was increasing in the UK partly because of cuts in public expenditure, because of reduced tax takes.

Eire has benefitted a lot from EU funding, because of its rural economy. 40% of the EUs spending is on agriculture. In the past Eire also benefitted a lot from EU regional aid although that has reduced in recent years, because Eire is no longer poor. This funding has allowed Irish farmers to be more efficient. The roads in Eire used to be poor, but not now.

40 years ago many young people from Eire came to the UK to work, now it is the other way round with people going from the UK to Eire to work. There are some big Irish companies in the UK now such as Kingspan (building insulation) Kerry Foods, Associated British! Foods (who own Primark). Magners, Smurfit (Packaging) , Paddy Power/Betfair.
 
True and owned by Diageo (part Irish part Scottish business). My guess is the spirits business worth more than the beer business. Diageo have some fantastic brands.
 
Redwurzel said:
Apple did a deal with the ROI Government so that they woiuld pay only 2% (I think) corporation tax on Apple's profits from all its EU operations by chanelling all its EU generated revenue into Ireland.

I believe Amazon did the same with Luxembourg.

It was one reason why I was getting sick of the EU. It was allowing large International companies to avoid massive amounts of tax, especially when poverty was increasing in the UK partly because of cuts in public expenditure, because of reduced tax takes.
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It's not that simple. If Eire (or Belgium or Luxembourg or Netherlands or other countries) don't do deals on Corporation Tax then Apple or Amazon or IBM or Microsoft or whichever company move their international corporate HQ to a different country so the revenue is recognised there. So the Corporation Tax moves too. A bit of Corporation Tax is better than none.

If the EU tries to act en bloc, then Apple moves the international HQ to somewhere else outside the EU, or back to the US. Transfer pricing, management charges and commission sales are the most common ways to move profits around.
 
The Irish GDP is massively overstated as a result of multi-national operations being incentivised to base in Ireland. The EU should perhaps focus on this as much as concerns over state aid intervention by Britain post Brexit.
The multinational turnover does boost the Irish GDP, but their tax take will be a very small fraction. Almost like the comparison of a Company growing revenue and profit at very different rates.
 
Soutra

Just tax them on their sales turnover like California does - this tax evasion/avoidance has been going on for 20 years - its unfair to retailers who pay their tax and it takes money from the poor and gives in to the rich.
 
Redwurzel said:
Soutra

Just tax them on their sales turnover like California does - this tax evasion/avoidance has been going on for 20 years - its unfair to retailers who pay their tax and it takes money from the poor and gives in to the rich.
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HMRC has been working on a tax based on sales for 20 years now, but they haven't produced anything worthwhile yet. Moving profits around by transfer price has been going on a lot longer than 20 years. Sony was doing it in the 1970s and just about every American software company from the 1980s took it to a new level.
 
I believe California Tax Authorities calculate what they believe the profits should be and say take 20% of that for corporation ax - its doesn't take them 20 years to work it out.

Another way is just tax them at 2% of turnover. Companies like Amazon benefit tremendously from our free health system, free education system, security services, public road network, subsidies from Government, tax credits for their workers. Their share price has gone through the roof, while the queues at foodbanks increase, partly because of public sector cutbacks.

The authorites here seem scared of them. What the worse that can happen they pull out and peole then buy from other retailers, some of which will be British and pay tax on their profits.

Why doesn't the EU stop Ireland from doing special deals? - Ireland does a deal just block their agricultural susbidies they will soon stop it.
 
Redwurzel said:
Soutra

Just tax them on their sales turnover like California does - this tax evasion/avoidance has been going on for 20 years - its unfair to retailers who pay their tax and it takes money from the poor and gives in to the rich.
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It's not just Ireland and Luxembourg either. Many multinationals (particularly US owned) are moving or have moved their profit centres and supply chain operations to Switzerland to cash in on low corporation tax. Despite not being a member of the EU they are in the EEA/Single Market.
My previous company moved all of their European supply chain operations into Switzerland and out of EU countries in which they operate. So they can now claim zero or very low profits being made in these countries and declare all profits in Switzerland paying a lot less tax. Good for share holders but not good for those countries who lose much needed taxes.
 
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Konrad_the_Barbarian said:
It's not just Ireland and Luxembourg either. Many multinationals (particularly US owned) are moving or have moved their profit centres and supply chain operations to Switzerland to cash in on low corporation tax. Despite not being a member of the EU they are in the EEA/Single Market.
My previous company moved all of their European supply chain operations into Switzerland and out of EU countries in which they operate. So they can now claim zero or very low profits being made in these countries and declare all profits in Switzerland paying a lot less tax. Good for share holders but not good for those countries who lose much needed taxes.
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I'm not sure anybody who is not in the senior leadership and shareholders of such organisations would pretend to make a case that these practises are for the greater good.
It is sickening.
 
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