My old employer Apple got a damned good kicking from the EU for availing of Ireland's, ahem, generous accounting practices regarding Corporation Tax.
In theory, we have an attractive flat rate of twelve per cent on all declared corporate profits and Enda swears we're sticking by that, come hell or high water. However, last year on a turnover of €18.3 billion, Google wrote the Irish taxpayer a cheque for €28.6 million. The decent ladies and gentlemen from the Revenue had the good grace to shuffle a lot and look away when asked about it. Fine Gael though brazened it out and gave Merkel & Co the two fingers. The EMEA Headquarters of Microsoft, Apple, Google, IBM, HP, Facebook, Pfizer, Ely Lily and many many more are all located in Ireland, (at 12 per cent per year …. in theory).
This morning we got the Facebook results for Ireland and I must admit, they are staggering. According to the Journal, they had sales of €4.8 billion booked through its local operations here. Do any of you know what products or services Facebook sold to the Irish that we could possibly have paid €4.8 billion for? Even NAMA, the largest real estate company in the world, didn't sell that much land last year.
But I digress! Let's give the Facebookers the benefit of the doubt and grant them that they did indeed sell us €4.8 billion worth of crap. What do you think they had to hand back to us in corp. tax? Yep! Apparently twelve per cent of their total gross profits, (€4,747,182 million), amounted to €3.4 million. Holy thundering Jesus! That's one euro in every €1,400 of profit making it less than point three of one per cent as their corporate rate.
But hang on. The Journal also gives us the Facebook statement of income and it makes interesting reading. Against that humungous profit figure for last year, they have placed some incredible administrative expenses. Apparently to run Facebook (Ireland) Ltd, it costs an unbelievable €4,734,693 million per annum. They employ 1,000 people in their Dublin office and I have to ask, how much are these kids paid?
"General and administrative expense is the set of expenses required to administer a business, and which are not related to the construction or sale of goods or services. This information is needed to determine the fixed cost structure of a business," according to 'accountingtools.com.' This however, does not go near explaining the astounding amount it takes to keep that Dublin office going. The donkeys in the Dail don't even cost a fraction of that and they're laying it on with a trowel. Like Apple of course, the company insists it adheres to all tax laws in the countries in which it operates.
Even the most trusting soul in a convent must look at these numbers and think, "Someone's taking the piss here." We are not allowed to call it a money-laundering operation but that is just what Obama is saying back at home where these companies come from. In english what Facebook is telling us is, that on sales of €4,837,053 million, they could only make an actual profit of twelve and a half grand. I'm sorry, but I for one just don't believe that. I'd believe in Santa before I'd swallow nonsense like that.
They are in fact telling us that they are close to going broke while ripping us off, ripping off the States too and anybody else they come in contact with. I am a firm believer in company profits because that is where re-investment and growth come from. But this charade is obscene. We have had to endure austerity budgets one after another for years, each one removing three billion from the economy and our society. Meanwhile Dame Enda stridently defends the state of corporate taxation here.
I must have a closer look at the administrative expense of running my home!