Ireland is the home of Guinness, St Patty's day and of course, the European HQ of some massive tech companies.
Background: Ireland is the home of Guinness, St Patty's day and of course, the European headquarters of some massive tech companies like Google, Facebook, Airbnb and Paypal (and more).
What happened: While it doesn't seem like the obvious choice to plonk a tech company's headquarters, Ireland has lured in big companies with a sneaky tactic: 12.5% corporate tax rates. To put that into perspective, large companies pay 30% tax in Australia.
What else: 130 countries (including Ireland) are going to bump their tax rate to 15% as part of a global minimum tax agreement. The aim is to limit the high levels of transfer pricing and shifting of profits.
💡Transfer pricing allows companies to move profits from high-tax jurisdictions to low-tax jurisdictions. And pretty much all the cool kids have been doing it.
💡Tech companies transfer a large portion of their profits from high-tax countries (*ahem* Australia) to low-tax havens like Ireland. And this comes at the expense of the high-tax countries.
💡Netflix paid around $550,000 in tax in Australia last year, despite estimates that it generated over $1 billion in revenue. Apple paid $498 million in taxable income on $9.6 billion in total revenue.
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