The EU Will Turn a Blind Eye to Ireland's Corporation Tax Wheeze as Long as it Keeps Taking the Migrants

The Daily Sceptic‘s top article on September 2nd was about Ireland’s racist SPHE1 schoolbook, a story broken by Gript.

Days later the Telegraph reported national outrage at the way Edco’s book pilloried traditional Irish families and values. And sure enough, the book’s been withdrawn and can no longer be ordered on Edco’s website.

I’m trying to get hold of a copy before they’re all pulped – a prime exhibit for the Museum of Woke one day. What lay behind this crude indoctrination of children, so repellent to Irish parents and teachers anywhere beyond the Dublin echo-chamber?

Some see the long arm of the EU’s Erasmus project, which started innocuously enough as a university exchange programme. Now, its 2021-27 budget is €26 billion and its pro-EU, anti-nation state propaganda even reaches down to Irish primary schools. Primary school parents, forced by slashed school budgets to pay for far more than just uniforms, notice this spending priority. Did Edco’s authors Anne Potts and Nodlaig O’Grady perhaps get a bit of help from Erasmus?

In their book, Family A (boo, hiss) is busy farming. Multi-racial Family B (yay!) seems too busy to do much work, with all its flying around swapping homes with foreign families and supporting foreign football teams. Curiously, no-one’s remarked, in the furore over the SPHE1 book, that Family A is doing its best to feed people and look after the land, while family B is burning up the planet: perhaps the authors found that too complicated, too mixed a message for children of 14 and 15?

So what, apart from meat and dairy goods, does Ireland produce? Visitors enjoy Ireland’s EU-funded motorways, with late-model cars buzzing around, coaches in plenty (the rail network is negligible) but hardly any trucks. Apart from distribution to shops, where are the goods? What supports this prosperity, now that last century’s waterfall of EU cash goes to later-joined and poorer countries?

Fintan O’Toole’s 2009 book Ship of Fools described the boondoggles and corruption of the Celtic Tiger years – his anecdotes are hilarious.

Much has not changed, though O’Toole’s writing has – for employment in Irish media only a particular point of view is allowed these days. But the Corporation Tax (CT) scam he described motors on.

CT accounted for 27% of Ireland’s tax receipts in 2023, with net CT worth €23.84 billion, up 5.3% on 2022. The U.K.’s proportion was 8.7% for onshore CT, with oil and gas taxed separately. In Ireland, 90% of CT is paid by foreign multinationals, and over four times as much CT is collected per head than in Germany or France.

But it’s the rates of tax which really matter to multinationals, with their brass-plate “headquarters” in Dublin Quays (see Ship of Fools again).

For non-trading income (investments only) CT is 25%; normal CT is 12.5% (it’s 25% in the U.K.); and there was a special 6.25% rate under the Knowledge Development Box (KDB) for intellectual property. International pressure is squeezing the KDB loophole, so as Brian O’Doyle described in May for Jacobin.com, companies can use this impenetrable wheeze:

Instead of moving profits through Ireland, CAIA [capital allowances for intangible assets] encourages companies to move their intellectual property (IP) into the country. The value of intangible assets is more difficult to measure than traditional investment, particularly as companies normally produce those assets in one arm of their business and sell them to another arm through a nonmarket (transfer) price.

The core advantage of this scheme is that it allows tax deductions against the cost of IP [which] is extremely difficult to evaluate correctly. Indeed, as the accounting firm KPMG told some of its investors in 2017, the benefits are almost limitless:

A hypothetical company with an equity market capitalisation of €1,000 million, but tangible assets of €100 million can argue that the gap of €900 million represents its intangible asset base, which can be legally created and appropriately located . . . Ireland’s CAIA Programme enables these intangible assets to be turned into tax deductible charges.

Ever wondered how Starbucks U.K., to take one of many examples “paid a ‘derisorily low’ £7.2m in U.K. corporation tax last year despite making a gross profit of £149m on sales of £548m in Britain”? (Guardian, April 5th 2024).

A multinational’s brass-plate “headquarters” in Dublin, charging royalties and licence fees to “subsidiaries” in other countries as intellectual property, can take care of inconvenient profits and pay helpfully little tax. That’s if it hasn’t managed to negotiate an even better deal than 6.25%, as many multinationals are said to do.

Pundits on RTE were worrying last month about the USA’s move to “onshore” jobs. One of the principal things Ireland actually manufactures – so, real jobs – is pharmaceuticals. Now Americans of both parties are asking why tax-dodging Big Pharma pays Irish people to produce pills of which three-quarters go down American throats: bring the jobs home, and the taxes. No wonder Dublin’s worried. But the EU will likely go on turning a blind eye to the CT boondoggle, remembering how onside Ireland was in Brexit-wrecking negotiations, and now by taking in refugees. Though as a result of the latter, public services are badly stressed and the housing market’s going crazy again (see O’Toole for the last occasion) – serious trouble brewing there.

The old Ireland, with its famous welcome and scenery, is still there for visitors to enjoy (though perhaps not quite as in this Telegraph reader’s fond recollection).

Here’s a snap I took in Connemara in June, our local paper loved it.

Happily, although scams trundle on, many of the worst of the old ways are only a memory (Catholic Church, anyone? In the old days it was the Jesuits who did the indoctrinating). One of Gript’s readers, commenting below its article on the preposterous SPHE1 textbook, said that 60 years ago the Educational Company of Ireland, today’s Edco, used to distribute leather straps for beating schoolchildren.