Unequal Scenes

The docklands, home to many US multinational corporations. Irish incentives to base companies here, mainly due to complicated and highly extractive tax policies, have created what many label as a tax haven.

Ireland ranks in all non-political "tax haven lists" going back to the first lists in 1994. The level of base erosion and profit shifting (BEPS) by U.S. multinationals in Ireland is so large, that in 2017 the Central Bank of Ireland abandoned GDP/GNP as a statistic to replace it with Modified gross national income (GNI).

(What is BEPS? In simple terms, it’s when technology companies use IP (intellectual property) to shift royalties from the place where they sell (Europe) to the place where they take profits (Luxembourg/etc, shifted through Ireland)).

To put it in perspective, 25 out of the 50 largest firms in Ireland are American, and represented 70% of all income in 2017. Apple alone was responsible for 26%. U.S. multinationals (MNIs) book over half of their non–U.S. profits in tax havens by using BEPS tools, the biggest of which is Ireland. Over 80% of corporate tax revenue in Ireland comes from US MNIs.

The Alliance is just one of many high-end apartment buildings created to cater to high-earning employees of the many "knowledge industry" corporations based in Dublin.

The docklands began as a SEZ (special economic zone) luring companies to regenerate Dublin with low base tax rates. It is anchored at the west end by the IFSC (International Financial Services Centre). It has since metastasized into an entire region of high-end apartments, corporate headquarters, banks, and civic institutions.

Office blocks dot the docklands area of Dublin. Many of them house corporate entities which have business descriptions that are laughably opaque.

For example: the block on the right is the headquarters of Suez Holdings, which lists on its website:

"Suez Holdings Ltd is part of a family of companies with a rich history, a solid presence and a bright future. Discipline, collaboration and a commitment to recognizing healthy growth, drive our work. Five fundamental values reflect our culture – performance, collaboration, innovation, social responsibility, and trust. I invite you to get to know us, do business with us, come to work with us and engage with us. We are proud of our decades of success and want to share our future successes with you."

Old and new in Dublin's docklands.

New construction in north docklands, Dublin.

Firstly, why are tax havens pernicious: Most obviously, the avoidance of paying corporate tax leads to a loss of tax revenue needed for proper civil enterprises and public services. If companies are hiding or moving their profits, and not paying tax, our schools, infrastructure, arts, health systems, etc are deprived of the funds they need to operate.

Secondly, what is a “tax haven”? “A tax haven is a jurisdiction with very low "effective" rates of taxation for foreign investors”. Ireland claims that its corporate tax rate is 12.5%, although in practice companies, mostly from the US and UK, pay vastly less. Apple paid .005% tax rate on its profits from 2004-2014, shielding €110 billion in profits from tax authorities (they later were forced to pay restitution on the avoided profits).

Lastly, the USA did re-write its tax law in 2018 which was an attempt to make US MNIs avoid tax havens (not so much because its “wrong”, but to entice them to domicile in the US instead). This is seen as having mixed success. Ireland’s economy is so disproportionately reliant on US MNIs, that any shifts would have a huge and negative impact on the Irish labor force and GDP (or “GNI”).

The overall issue - that corporations don’t pay tax when they should - negatively impacts the living standards of populations who rely on social spending in every country that the product is sold - namely, the US and the EU. Understanding these complex and fairly “hidden” permutations of the tax system are crucial towards reducing inequalities.

Meta International HQ, Dublin.

IFSC (International Financial Services Centre), Dublin.

Google Campus, Dublin.

Renovation and gentrification in the heart of Dublin's financial services and tech district.

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