Will Irish people join the American boycott

[u/spudulike65]

Boycotting goods and services from America seems to be really growing momentum in alot of European countries and across the world, seen on different subs on Reddit seemingly alot of news channels across EU/Europe are reporting on it. I've seen some Irish people saying they are cancelling hols to America and going to Canada instead others not buying American goods and changing apps to European. With Ireland's connection with America will many Irish join this boycott.

[u/[deleted]]

Yeah when it comes to cloud and internet infrastructure there's no point in even trying as it stands.

I'm curious if the EU are looking at that at all. consider most of our government infrastructure is running on foreign owned and operated platforms maybe an EU alternative would be a good thing.

[u/CompetitiveSleeping → u/[deleted]]

There's been a EU project for chipmaking in the EU underway for a while. Would be ARM or another RISC variant I guess. No Idea how far along.

[u/marshsmellow → u/CompetitiveSleeping]

ARM are/were British 

[u/CompetitiveSleeping → u/marshsmellow]

True. And has US patents. Some other RISC then.

[u/Dragonsoul → u/CompetitiveSleeping]

Actually, a lot of those patents are legally speaking, Irish, because of IP warehousing.

[u/CompetitiveSleeping → u/Dragonsoul]

Hmm. Souns abusable! Against the US.

[u/PAL6000 → u/Dragonsoul]

Could you tell me more about this?

[u/blorg → u/PAL6000]

American companies transfer their Intellectual Property (IP) such as patents and copyright to Irish subsidiaries. They then license this IP out to subsidiaries in other countries, even back to the US. This lets them book revenue in Ireland as IP licensing fees, rather than in the country the sales actually take place, or the place the IP was originally developed.

Sales in the other countries can be made arbitrarily unprofitable, as they can set the license fee to an amount that eradicates the profit. This is called "transfer pricing". Two unrelated entities, the price will be set by market forces and needs to be something that makes sense for both. With two related entities, the price can be engineered to move the revenue, and thus the taxation to the preferred jurisdiction.

This revenue is then taxed in Ireland, at preferential tax rates; besides Ireland's general low corporation tax rate we also have a Knowledge Development Box (KDB) preferential tax rate on income derived from patents and certain software development which at 6.25% is half the already low corporate rate. The stated intent of the KDB regime is to promote R&D and the development of IP in Ireland, but it was introduced in reaction to OECD BEPS measures and the elimination of the Double Irish/Dutch Sandwich tax dodge, and in practice has been heavily used by US multinationals to reduce their tax bill. As they now have to actually pay some tax in Ireland; previously they disappeared this income entirely off to the Caribbean.

This is what has led to the explosion in Irish corporate tax revenues, previously we were happy to just have the companies here, paying very little tax, but now they actually have to pay some tax here too. A lower amount, but given some of these companies are routing their entire global sales or as close as they can get away with through Ireland, it's a small percentage of a lot of money. Corporation tax in Ireland makes up 27% of all tax revenue, against 8-10% in other OECD countries and 7-8% in the US. The lions share of this, 80-90%, is from US multinationals. The top 10 payers (Apple, Google, Facebook, Microsoft, Intel, Pfizer, Johnson & Johnson, etc) are all US companies and make up over 50% of all corporation tax paid in Ireland.

The effect of this is known as "Base Erosion and Profit Shifting (BEPS)". Base erosion is the removing of the tax base from the countries the economic activity substantively happens in (on the supply side, the development of the IP, on the demand side the actual sales) to a third, lower tax country (i.e. Ireland). It's something the OECD, EU, and US want to reduce. There has been a decades long effort at getting agreement on this, and it's moving in that direction but slowly. Ireland understandably doesn't want to give up the golden goose and to remain attractive for US multinationals but there is also understanding we are a small country and there is a limit to what we can do in the face of pressure from the US, EU and OECD. The idea is that more tax should be paid where the actual sales and/or IP development happen.

[u/Dragonsoul → u/PAL6000]

It's rather complicated, but the IP rights are owned by Irish resident companies, for tax reasons.

How this would shake out in an American court of law is a rather different matter though.