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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.

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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.

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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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Green

The Unsustainable Future Of Fish Farming — On Vivid Display In Turkish Waters

Currently, 60% of Turkey's fish currently comes from cultivation, also known as fish farming, compared to just 10% two decades ago. The short-sightedness of this shift risks eliminating fishing output from both the farms and the open seas along Turkey's 5,200 miles of coastline.

Photograph of two fishermen throwing a net into the Tigris river in Turkey.

Traditional fishermen on the Tigris river, Turkey.

Dûrzan Cîrano/Wikimeidia
İrfan Donat

ISTANBUL — Turkey's annual fish production includes 515,000 tons from cultivation and 335,000 tons came from fishing in open waters. In other words, 60% of Turkey's fish currently comes from cultivation, also known as fish farming.

It's a radical shift from just 20 years ago when some 600,000 tons, or 90% of the total output, came from fishing. Now, researchers are warning the current system dominated by fish farming is ultimately unsustainable in the country with 8,333 kilometers (5,177 miles) long.

Professor Mustafa Sarı from the Maritime Studies Faculty of Bandırma 17 Eylül University believes urgent action is needed: “Why were we getting 600,000 tons of fish from the seas in the 2000’s and only 300,000 now? Where did the other 300,000 tons of fish go?”

Professor Sarı is challenging the argument from certain sectors of the industry that cultivation is the more sustainable approach. “Now we are feeding the fish that we cultivate at the farms with the fish that we catch from nature," he explained. "The fish types that we cultivate at the farms are sea bass, sea bram, trout and salmon, which are fed with artificial feed produced at fish-feed factories. All of these fish-feeds must have a significant amount of fish flour and fish oil in them.”

That fish flour and fish oil inevitably must come from the sea. "We have to get them from natural sources. We need to catch 5.7 kilogram of fish from the seas in order to cultivate a sea bream of 1 kg," Sarı said. "Therefore, we are feeding the fish to the fish. We cannot cultivate fish at the farms if the fish in nature becomes extinct. The natural fish need to be protected. The consequences would be severe if the current policy is continued.”

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