Government Change

[motorbiking]

Have you got a report or some analysis - I will be interested to see the effect on FDI and GDP per tax rate as their is a quality and quantity effect.

https://www.oxfam.org/sites/www.oxfam.org/files/bp-race-to-bottom-corporate-tax-121216-en.pdf

I wouldn't call it an independent report as it focuses on the negatives, but the information is factual. There are plenty of reports that show how the countries benefit. A good baseline is the GDP per capita, https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita - this shows a reasonable correlation.

You can google individual cases e.g. http://www.cnbc.com/2016/08/31/why-silicon-valley-followed-apple-to-ireland-eventually.html

 

[SirGalahad]

https://www.oxfam.org/sites/www.oxfam.org/files/bp-race-to-bottom-corporate-tax-121216-en.pdf

I wouldn't call it an independent report as it focuses on the negatives, but the information is factual. There are plenty of reports that show how the countries benefit. A good baseline is the GDP per capita, https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita - this shows a reasonable correlation.

You can google individual cases e.g. http://www.cnbc.com/2016/08/31/why-silicon-valley-followed-apple-to-ireland-eventually.html

The problem is on the surface the argument seems so alluring but in effect the evidence is still inconclusive because of the way MNC operates. It's why countries want a collaborative approach to setting tax. If you set up your HQ in Ireland and manufacturing in Spain then Spain gains the labour taxes and income whilst Ireland gains the corporate taxes. There is a quantity and quality effect. This skews investment decisions.

To summarise it best. There are lots of economic papers on this I would add the following

https://home.kpmg.com/uk/en/home/me...x-rate-is-unlikely-to-be-enough-to-encou.html

Will a further cut really make a difference? Whilst from a policy perspective it may help towards making the UK a ‘super-competitive economy’, a reduction in rates will likely not be enough on its own to drive FDI. KPMG surveys of clients have consistently concluded that companies want stability, predictability and certainty, both in economic (including tax) and political terms.

Corporations are not averse to paying tax, what makes their life easier is having stability in supply of employees and markets within a strong legal framework.

Too many people just see the headline numbers and not the story behind it.