The disgracefully nominal amounts of corporation tax being paid by some of the largest multinationals (MNCs) based in Ireland have come to the forefront of the news in recent months. The right-wing rag The Irish Independent even has had to adopt headlines such as “Google chief: ‘I’m proud of tax we pay – it’s called capitalism” such has been the incredibleness of the figures.
Complicated tax schemes such as the “Dutch sandwich” and the “Double Irish” allow these MNCs to avoid paying tax through royalties, licensing and other legal wrangles. These have allowed Google to pay only 0.14% tax over the last 7 years on profit of €40 billion and Starbucks to pay only €35k in tax since 2005 whilst routing €5.7 million in profit to its parent company. The average for most multinationals is only a 6.5% tax rate.
The Minister for Finance, Michael Noonan, has repeatedly peddled the lie that such tax loop-holes can only be closed by the American government and therefore our own lawmakers have no influence or power in making these corporations cough up. This simply cannot be accepted as legitimate. It was recently reported that the French Government were looking to take legal action against Google France for routing profit through Google Ireland, this theoretically leads to the question; is the Irish Government therefore complicit in such tax evasion?
In Britain, Amazon, Google and Starbucks were recently accused of an “immoral” use of secretive jurisdictions, royalties and complex company structures to avoid paying tax on British profits by the Commons public accounts committee.
Originally corporation tax was lowered to 10% across all sectors of the economy in the early 1990s around the foundation of the Irish Financial Services in order to facilitate huge profit opportunities for Irish financial capital, eventually global financial capital flocked to Ireland seeing it as a prime tax haven location. It is imperative that the myth surrounding corporation tax as a “jobs stimulus” be exposed and that an ideological battle is waged against it.