愛爾蘭國際經濟類dissertation：國際稅收分配分析International Taxation Assignment 2

Introduction to Topic:

主題簡介：

Metronomic Group of Companies has been experiencing macro environmental changes that in turn have made it very difficult for the organisation to continue its business in the existing setup with the major holding company located in Ruritania. The major changes that have affected the business organisation is that they will not be able to enjoy the international tax advantage anymore that they were enjoying throughout its history due to favourable tax environment at Ruritania. In order to enjoy continued growth and success, it is vital for the business organisation to engage  in finding another country where the country could base its holding company and where favourable tax structure exist for MNCs with respect to international taxation. The writer of this paper believes that the Ireland is one such place that offer remarkable opportunities to organisations having an operation at multiple destinations who should be provided positive tax relief to facilitate their international expansions. 

節律組公司已經經歷了宏觀環境的變化，已經變得非常困難，該組織繼續其業務在現有的設置與主要控股公司位于Ruritania的。影響企業組織的重大變化，是他們將無法享受國際稅收優勢可言了，他們享受著在其整個歷史由于有利的稅收環境。

How the Ireland offers Remarkable Opportunities to MNCs for International Expansion:

愛爾蘭如何跨國公司國際擴展提供了極好的機會：

Ireland, which is a located in the Europe and a member of OECD offer remarkable opportunities to Metronomic Group of Companies for locating its manufacturing facilities as well relocating its main holding company in the country. The country, although not a haven to foreign investors, however could be termed as a major door to MNCs due to remarkable opportunities that the country offers in terms of taxation . Corporate entities that working in the country are subject to corporate income tax that is governed by Ireland Corporate Tax Law, and the tax system in the country could be termed as an imputation system where efforts are directed to avoid the double taxation of distributed income (Ruane & Gorg, 1997). The corporate tax that MNCs pay has been set as a low as 12.5% that has been helping the country to attract MNCs into the country. The country has emerged as a base for manufacturing where products are exported to the rest of the European countries (Sang-Hyup, 2007). 

愛爾蘭，這是一個位于歐洲和經合組織的成員提供了極好的機會，公司節律組定位其主要控股公司在國內以及搬遷其生產設施。國家，雖然不是外國投資者的避風港，然而，被稱為門跨國公司作為主要由于顯著的機會，國家在稅收方面提供。

As most of the income that Metronomic Group of Companies earned in different parts of the world could be termed as distribution income, the country emerged as a natural choice for managing the holding company (Economist Intelligence Unit, 2012). In addition, the country offers remarkable opportunities due to lower corporate taxation rate that has been positively contributing to the GDP of the country. Organisations that operate within the country are required to maintain an account of the imputation credit where the tax that the corporate entity has paid and the imputation credit associated with the dividend are recorded (Ruane & Buckley, 2006). 

By locating the central management of the company in the country, Metronomic Group of Companies could ascertain the resident company status whereby the company will enjoy many tax incentives  (Hanlon & Heitzman, 2010). The corporate tax rate in the country is just 12.5% which is considerably low; the fact is that for organisations like Metronomic Group of Companies, the Irish market offer different incentives which include transfer pricing and thin capitalization (Ruane & Buckley, 2006). The organisation may benefit from the join taxation and the losses of different subsidiaries situated in different parts of the world could be adjusted against the profit made by another subsidiary of the firm.  The country is a lucrative market for the establishment of a holding company because the country provides double taxation relief using the credit method, which is mostly not available in different parts of the world (Gorg, et al., 2011). The source by source method is used in the country to give the tax relief. In addition, the country has different unilateral agreements with different countries to avoid double taxation, besides bilateral tax treaty which is based on the OECD Model Tax Treaty (Economist, 2011). 

In addition, Ireland is an attractive market for the location of the holding company because it also allows those organisations that have accomplished the resident status in the country to carry forward their excess taxes  (Lymer & Hasseldine, 2009). However, the country did not allow any tax refund; it could be only adjusted in subsequent years (Economist Intelligence Unit, 2012).  The holding companies formed in the country could use the cash flows that it generates from its different subsidiaries located in different parts of the world and the holding  company is considered the sole owner of all the cash flows and foreign control barring are exercised on the cash received or paid to foreign subsidiaries (Gorg, et al., 2011). The remittances that may take place include capital transitions, dividends, royalties, lease, and transfer pricing. 

Conclusion:

Based on the discussions in the paper, the Ireland market is one of the most lucrative country in the world that offer remarkable opportunities to multinational enterprises, and perhaps this is the reason MNCs from different parts of the world have located their operations in the country. Ireland since the early 1980s has emerged as a hub from that MNCs are used as a production base for catering to the needs of the entire Europe as well as North America (Mahony & Barry, 2005). Although, there are different reasons that MNCs are using Ireland as the base, however the lucrative tax haven prevailing in the country is one of the major reasons that have been contributing to the MNCs decisions  (Hanlon & Heitzman, 2010). This is also reflected by glancing at international business figures of the country before 1980s when the country was maintaining high corporate taxes (Mahony & Barry, 2005); however, the country experienced a sudden surge in the number of MNCs operating in the country when it decided to lower down its corporatea remarkable increased towards remarkable increase in the number of MNCs operating in the country who uses the country as a base for exploiting the EU market (Cordes & Ebel, 2008). 

Works Cited

Cordes, J. J. & Ebel, R. D., 2008. Encyclopedia of Taxation and Tax Policy. USA: Prentice Hall.

Economist Intelligence Unit, 2012. Ireland. [Online] 

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Economist, 2011. Countries with the Fastest and Slowest Growth Forecasts. [Online] 

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Gorg, H., Hanley, A. & Stobl, E., 2011. FDI in Ireland: New Findings for Grants and Local Partnership. [Online] 

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[Accessed March 2012].

Hanlon, M. & Heitzman, S., 2010. A Review of Tax Research. Journal of Accounting and Economics, 50 (2/3), pp. 127-178.

Lymer, P. & Hasseldine, J., 2009. The International Taxation System. UK: Kluwer Academy Publishers.

Mahony, C. O. & Barry, F., 2005. Making Sense of the Data on Ireland's Inward FDI. Journal of the Statistical and Social Inquiry, 30 (5), pp. 28-65.

Ruane, F. & Gorg, H., 1997. The Impact of Foreign Direct Investment on Sectoral Adjustments in the Irish Economy. National Institute of Economic Review, Volume 12, pp. 160-169.

Ruane, F. P. & Buckley, P. J., 2006. Foreign Direct Investment in Ireland: Policy Implications for Emerging Economies. The World Economy, 29 (11), pp. 1611-1628.

Sang-Hyup, S., 2007. An Analysis of the Inward FDI Policy of Ireland. International Area Studies Review, 10 (1), pp. 131-150.