Comments for Why Irish eyes are smiling at http://www.adamsmith.org , comment 1 to 2 out of 2 comments http://www.adamsmith.org Fri, 05 Dec 2008 08:04:09 +0100 FeedCreator 1.7.3 http://www.adamsmith.org/blog/tax-and-economy/why-irish-eyes-are-smiling-200805071339/#comment-179 Quote: With such stiff competition on its doorstep, why can't the UK government see what it must do? Presumably get the EU to legislate against such a tax differential? - as happened with VAT a few years ago. - Steve Giess Wed, 07 May 2008 09:40:41 +0100 http://www.adamsmith.org/blog/tax-and-economy/why-irish-eyes-are-smiling-200805071339/#comment-178 The 12.5% rate vs 30% rate isn't the important bit. The key to this is that international groups already pay a load of corporation tax etc overseas. The actual location of the head office has little impact, what is relevant is that within Europe, only Ireland and the UK charge dividends from overseas countries to tax in full (most are 100% or 95% exempt). Both countries give credit for overseas tax paid, so a UK holding company pays additional tax if it receives dividends from a subsidiary in a country with an effective rate below 30%. An Irish holding company only pays more corp tax if it gets dividends from a country with a rate below 12.5% (which are few and far between). According to HMRC figures, exempting overseas dividends (like all the other European countries) would only 'cost' £1 bn, i.e. pretty much bugger all in the grander scheme of things, bung in some additional taxes on head office salaries and we've broken even. And then there's the UK's high occupancy costs - apparently office space in Manchester is as expensive as in Manhattan, a bit of liberalising the planning system might help there, methinks. What is it with you right-wingers and corporation tax? It's VAT and Employer's NIC that are the real killers (which taken together raise about three times as much as corporation tax)! I shall now shamelessly link to my summary international tax manifesto. - Mark Wadsworth Wed, 07 May 2008 09:40:14 +0100