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CHP 12 - The Economics of Irish Foreign Policy (Tax Havens (The Common…
CHP 12 - The Economics of Irish Foreign Policy
Tax Havens
corporation tax rate at 12.5% - low for EU standards
stable tax regime
foundation stones of Irish Foreign investment boom
A double tax agreement would secure that they paid only one tax and the tax to the Irish exchequer
The evolution of bilateral foreign investment relationships
International Finical Services centre
Special Purpose Investment Companies to manage corporate liquidity and avail of the new low tax rate
tax across al sectors is 12.5%
Wild west of European finace
The ECJ ruled in 2006 that this was incompatible with the free movement of the establishment and capital within the EU
illustrative of the effective way in which IFP can be moblised
Mostly the US
When the Panama paper came out lots of companies moved to Ireland
THE SINGLE MARKET
The Common Consolidated Corporate Tax Base
Multi-national corporation (MNCs)
apportionment formula - taxable profits
Engage Constructively
so radical a departure from the current tax system that there would be huge uncertainty so its impact on individual members state tax revenue
Trade Policies after the EU
EU unwillingness to move further on agricultural liberalisation
Irish markets still focused on the UK
assisting them in connecting with international buyers
External trade policy is now decided upon and implemented at the EU level
Industrial Development Agency
increasingly diverse source of foreign direct investment available
international offices - listening posts
no longer a low - cost manufacturing location
Strong presence of foreign owned multi-national companies
16,000 out of 155,000 jobs are in foreign - owned export -oriented industry and services
zone of monetary stability in Europe in 1978
European Monetary System (EMS)
WTO - Trade liberalisation package
Irish business cycle was out of sync of the Eurozone
The entire EU structural funds programme was massively expanded in 1989 in the lead up to the single market
Inward investment
Trade Policies up to the EU
The suppression of quantitative import restrictions is much easier for a high tariff country than for a low tariff country
European Free Trade Association (EFTA) - no
Organisation for Economic Co-operation (OEEC)
The Anglo-Irish free trade Area agreement
General Agreement on Traffis and Trade (GATT)
the existence of a strong,rules-based,multilateral trading system- embodied in WTO
REDUCE THE COUNTRIES DEPEDENCE ON THE UK
As a small exporting economy,IRL relies on a Liberal global trading environment
ensuring a stable and open trans- Atlantic trade and investment relationship is a key strategic economic priority
ITP must also reflect non-trade concerns e.x human rights
Foreign direct investment IDI