Bashing big business is de rigueur these days – an appropriate use of a French phrase considering the recent early morning raid by (reportedly) around 100 investigators and five magistrates on Google’s offices in Paris. Accusations of aggravated financial fraud and money laundering abound, linked to Google’s headquarters in Ireland. That is quite a joint accusation against one the globe’s biggest businesses.
But it is no secret that France – with Germany – has long held a grudge against Ireland and its competitive business tax and streamlined regulatory environment. That grudge became most apparent when the Celtic tiger lost its teeth during the financial crash, and refused to budge on calls led by those two countries to increase its low (for EU standards) 12.5 percent corporate tax rate as a condition for a bailout.
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The Miscellaneous Tariff Bill (MTB), passed by the United States Senate on May 10, is unlikely to be grabbing any headlines in an increasingly uncertain and volatile world. But it deserves a mention, if only because it shows that Democrats and Republicans can come together on tax-related issues. It’s also refreshing to see a piece of legislation that will, hopefully, reduce trade taxes for US businesses, amid all the hubbub created by rumblings around raising barriers to trade with certain countries from some quarters of the presidential campaign.
This is a highly-charged political debate of course, involving as it does patriotism and economics, but mixing nationalism with economic policy is rarely a recipe for success, and can often come back to bite the Governments that carry them out (not to mention the people who suffer economically as result).
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France may or may not bring forward corporate tax cuts scheduled to be phased in over the next three years, depending on which report you believe. But, as the old saying goes, there’s no smoke without fire, and for such a report to have reached the French media in the first place indicates that the idea must have been discussed in the upper echelons of the French Government. This is a good thing for taxpayers in France because it betrays a sense of urgency on the part of some in Government that the pace of reform is going too slow. And it is. Under the Growth and Responsibility Pact, corporate tax is due to be cut from 33.33 percent to 28 percent – still high by international standards – by 2020.
If fact, it seemsthat President Hollande has experienced some … Read More »
UK Chancellor George Osborne received quite a bit of criticism for his decision to slash the rate of CGT in his most recent budget in March. This is because it was perceived by his opponents as a tax cut for the rich, as it will largely benefit those wealthy enough to invest and to have built up a company. That may be true, but surely the corollary to that is a high rate of capital gains tax will discourage people from investing and building up companies? And what’s the sense in that when economic times are already uncertain? The UK’s business leaders certainly seem to think this was the right move at any rate, with almost 80 percent telling a recent survey that investing in small companies in the UK would be more attractive as a result of the new … Read More »
It was encouraging to see German Finance Minister Wolfgang Schäuble rebelling against European Commission proposals for public country-by-country reporting at the latest meeting of EU finance ministers, given the weight of Germany’s voice in the EU. It’s going against the grain these days to question the call for greater corporate transparency. And perhaps there’s an argument that multinational firms could benefit from being more open about their activities from a public relations point of view, in much the same way as offshore jurisdictions like Guernsey have. Yet, as Schäuble suggested, there has to be a balance between “transparency and practicality.”
As Schäuble pointed out to his counterparts in Brussels recently, publishing sensitive company information in the public domain could lead to all sorts of unintended consequences, such as “lining someone up to be pilloried publicly.”
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