Economy

Irish Trade Minister: Internet Giants "Not Ethical" In Seeking Tax Havens

THE IRISH TIMES (Ireland), LA STAMPA (Italy), THE NEW YORK TIMES (U.S.A.)

Worldcrunch

DUBLIN - It's such a simple system. You buy something and it is sent to you. What you don't know is that the transaction is done through a company in Luxembourg that pays very little to the Grand Duchy and almost nothing to the Ministries of Finance.

Amazon, the company that sells via the Internet has their European headquarters in the tax haven of Ireland and they deposit their seeds into the various other markets across the continent.

Photo: Balajimuthazhagan via Wikipedia

"It's a question that we will deal with" assures Joe Costello, Irish Minister for Trade and Development, in an interview with Italian daily La Stampa.

He is angry with online trading companies that willfully look to pay less tax than they should, like Amazon, by passing their revenues through low-tax havens like Luxembourg, the Channel Islands and Ireland itself.

"It's legal" admits Costello "but I don't think that it's ethical".

The European Parliament has raised the issue and even the more free-market oriented British have too. This is not only a practice that represents a loss of revenue to the governments, but is a potentially unfair competition against other retailers. "If we do not act, there will be people to force us to" insists Costello. In Ireland there is a corporate tax of just 12.5%.

The Irish Times reported in November that France had made a $252 million tax claim against Amazon, signalling a widening crackdown by Paris on multinational companies that channel profits through low-tax countries. France has long protested against Ireland’s low tax rate and hopes EU discussions on a common consolidated corporate tax base will lead to a more harmonized system.

Minister Costello told La Stampa Ireland also has a serious problem with Google, which winds up paying an estimated 2% in taxes after deductions are accounted for. "They tell us that they create jobs and pay taxes, but we don't think it's enough," says Costello.

The issue has not yet been defined by the Irish government, which presides over the EU for the next six months; Costello believes that it might be more effective to raise the debate in Brussels.

Google's Dublin HQ at the Grand Canal Docklands. Photo: infomatique via Flickr

According to The New York Times, though Google employees across Europe advise clients on the use of the company’s services, advertisers sign contracts with the company’s subsidiary in Ireland. This has shielded Google from tax liability in France, Britain and other European countries, at least so far. French fiscal authorities are now seeking back taxes and penalties from Google, amounting to 1.7 billion euros.

“Google is saying, ‘We just float around freely above this useful aircraft carrier, Ireland,” said Richard Murphy, founder of the Tax Justice Network, an independent organization that campaigns against what it calls tax “loopholes and distortions.” “What France is saying is, ‘We don’t think you float around over Ireland, we think you are in France.’”

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Art installation "Greetings From Giza" by French artist and photographer JR faces the pyramids of Giza in Egypt

Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 你好*

Welcome to Tuesday, where violence erupts after Sudan's military coup, Australia finally gets onboard with climate change goals, and Harrison Ford stars in Raiders of the Lost Credit Card. From Bogota, we also see what the capture of drug kingpin Otoniel means for Colombia, a country long stained by cocaine trafficking.

[*Nĭhǎo - Mandarin Chinese]

💡  SPOTLIGHT

Saving the planet is really a question of dopamine

The elite of the ecologically minded are set to descend on Glasgow next week for the Cop 26 conference on climate change. But beyond debating policy prescriptions, French daily Les Echos explores the role our own brains have on making the right choices for the planet:

Almost every week, a new scientific study alerts us to the degradation of the environment. And yet, we continue not to change anything fundamental in our systems of production and habits of consumption. Are we all suffering from blindness, or poisoned by denial?

In his popular books Le Bug humain (The Human Bug) and Où est le sens? (Where is the Sense?), Sébastien Bohler, a journalist in neuroscience and psychology, provides a much more rational explanation: The mechanism responsible for our propensity to destroy our natural environment is in fact a small, very deep and very primitive structure of our brain called the striatum.

This regulator of human motivation seems to have been programmed to favor behaviors that ensure the survival of the species.

Since the dawn of humanity, gathering information about our environment, feeding ourselves, ensuring the transmission of our genes through sexual intercourse and asserting our social status have all been rewarded with a shot of dopamine, the "pleasure hormone."

Nothing has changed since then; except that, in our society of excess, there is no limit to the satisfaction of these needs. This leads to the overconsumption of food and addictions to everything from sex to social media — which together account for much of the world's destructive agricultural and energy practices.

No matter how much we realize that this is leading to our downfall, we can't help but relapse because we are prisoners of the dopamine pump in the striatum, which cannot be switched off.

According to Bohler, the only way out is to encourage the emergence of new values of sobriety, altruism and slowness. If adopted, these more sustainable notions could be recognized by the striatum as new sources of dopamine reward. But there's the challenge of promoting inspiring stories that infuse them with value.

Take the photo-collage exhibition "J'agis ici... et je m'y colle" ("I'm taking action here... and I'm sticking to it"), a collection of life-size portraits of residents committed to the energy transition, displayed on the walls of the French coastal city of La Rochelle.

Backed by the French National Center for Street Arts, photographer Martin Charpentier may be employing artistic techniques, but he's also tinkering with neuroscience in the process.

Stefano Lupieri / Les Echos

🌎  7 THINGS TO KNOW RIGHT NOW

• Sudan in chaos following military coup: After Sudan's military seized power from the transitional government, defiant anti-coup protesters have returned to the streets of the capital city Khartoum, for a second consecutive day. At least seven people have been killed and 140 injured. Coup leader General Al-Burhan has announced a state of emergency across the country, while the military cut off access to the internet and closed roads, bridges, and Khartoum's airport. Washington condemned the coup and suspended aid, and the U.N. Security Council was expected to discuss Sudan behind closed doors later today.

• Egypt lifts state of emergency in force since 2017: Egyptian President Abdel Fattah el-Sisi, announced the end of a four-year-old state of emergency, undoing powers that had given the government sweeping authority to quash protests, make arrests, search people's homes without warrants, and control everyday life in the most populous Arab country.

• Platforms take down Bolsonaro video linking vaccine and AIDS: Facebook, Instagram and YouTube have removed an anti-vaccine video from their respective platforms posted by Brazilian President Jair Bolsonaro. Beyond blocking the video, in which Bolsonaro falsely linked the COVID-19 vaccine with developing AIDS, YouTube went further and suspended the far-right leader for a week.

• COVID update: The U.S. will launch a new travel system on November 8, imposing new vaccine requirements for most foreign national travellers and lifting severe travel restrictions over China, India and much of Europe. Meanwhile, authorities in northern China are reimposing lockdown, and other emergency measures as COVID-19 infections spread to 11 provinces.

• Australia pledges net zero emissions by 2050: As one of the world's largest emitters of greenhouse gases per capita and a major exporter of fossil fuels such as coal, Australia has finally committed to becoming carbon-neutral by 2050. This is a target already adopted by most nations heading to next week's COP26 international climate conference, but that Australia had so far refused to pledge.

• Japanese princess loses royal status over wedding: Japan's Princess Mako married her boyfriend Kei Komuro, giving up her royal status. Under Japanese law, female imperial family members lose their status upon marriage to a "commoner" although male members do not.

Raiders of the Lost Credit Card: A tourist returned the credit card of American actor Harrison Ford, who had lost it in Sicily while shooting scenes for the latest Indiana Jones movie.

🗞️  FRONT PAGE

"Out of control," titles German daily Süddeutsche Zeitung, reporting on the release of a series of articles by a consortium of 17 U.S. news outlets, called the "Facebook Papers," that reinforce whistleblower Frances Haugen's claims that the social media giant is prioritizing profits over the well being of its users and society.

#️⃣  BY THE NUMBERS

$1.01 trillion

After striking a deal to sell 100,000 electric vehicles to car rental firm Hertz, Elon Musk's Tesla has joined Apple, Microsoft, Amazon and Google's Alphabet in the club of companies that have reached a $1 trillion valuation.

📰  STORY OF THE DAY

What the capture of a drug kingpin means for Colombia

While the capture of Otoniel, Colombia's most wanted drug trafficker, made global headlines, Bogotá daily El Espectador writes about the significance of the news for a country that has battled narcotrafficking for decades.

👮 The arrest of the Colombian mobster Dairo Antonio Úsuga David, a.k.a. "Otoniel," is a victory for Colombian intelligence, law-and-order forces and the broader fight against crime. Details of the eight-year-long pursuit of the head of the Gulf Clan, of the tireless and meticulous work, testify to the capabilities that the police and army have managed to develop in the fight against the narco-trafficking that has long been a stain on Colombia.

🇨🇴🇲🇽 Otoniel is responsible for a criminal organization with more than 3,800 members and influence on 12 departments and 128 districts in Colombia (though data from the Bogotá-based Peace and Reconciliation Foundation counts 211 districts). The Gulf Clan sends half the drugs going out of Colombia, and is the main exporter to Mexico. Its ties to the Mexican cartel chief Joaquín "el Chapo" Guzmán are well-documented — and Otoniel had aspired to fill the power vacuum left by Guzmán's capture.

⚖️ Some have observed that the ensuing power vacuum will engender more violence, which is true. But we are, in any case, far from eliminating drug trafficking in Colombia or cutting its tentacles across public life. That shows the limitations of the hard-line response to drugs, when we have seen it is not enough. Still, it is essential in any fight against crime for the state to show its operational capabilities. The message is clear: not even drug overlords are above the law in Colombia.

➡️ Read more on Worldcrunch.com

📣 VERBATIM

"I love Mako. I would like to spend my one life with the person I love."

— Kei Komuro said during a news conference after his wedding with Japan's Princess Mako, the niece of the current emperor and the sister of the likely future sovereign. The princess lost her royal status as a result of her marriage with Komuro, a "commoner."

📸  PHOTO DU JOUR

An art installation "Greetings From Giza" by French artist and photographer JR faces the pyramids of Giza in Egypt, as part of the 2021 exhibition "'Forever Is Now," the first international art exhibition to take place there — Photo: Balkis Press/Abaca/ZUMA

✍️ Newsletter by Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

Send all commoner and royal well wishes to Mako and Kei — and let us know what the news looks like from your corner of the world! info@worldcrunch.com

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