Editing Corporate haven (section)

===Employment tax===

Several modern corporate tax havens, such as Singapore and the United Kingdom, ask that in return for corporates using their IP-based BEPS tools, they must perform "work" on the IP in the jurisdiction of the haven.  The corporation thus pays an effective "employment tax" of circa 2–3% by having to hire staff in the corporate tax haven.<ref name="smh">{{cite web|url=https://www.smh.com.au/business/singapore-remains-the-top-choice-for-multinational-hubs-tax-data-shows-20150429-1mw59e.html|title=Singapore remains the top choice for multinational hubs, tax data shows|date=30 April 2015|access-date=19 May 2018|archive-url=https://web.archive.org/web/20180520053747/https://www.smh.com.au/business/singapore-remains-the-top-choice-for-multinational-hubs-tax-data-shows-20150429-1mw59e.html|archive-date=20 May 2018|url-status=live|df=dmy-all}}</ref>  This gives the haven more respectability (i.e. not a "[[brass plate company|brass plate]]" location), and gives the corporate additional "substance" against challenges by taxing authorities. The OECD's Article 5 of the  [[Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting|MLI]] supports havens with "employment taxes" at the expense of traditional [[tax haven]]s.

{{quote|Mr. Chris Woo, tax leader at PwC Singapore, is adamant the Republic is not a tax haven. "Singapore has always had clear law and regulations on taxation. Our incentive regimes are substance-based and require substantial economic commitment. For example, types of business activity undertaken, level of headcount and commitment to spending in Singapore", he said.|''[[The Straits Times]]'', 14 December 2016<ref name="straits"/>}}

Irish IP-based BEPS tools (e.g. the "[[Double Irish arrangement#Backstop of capital allowances|capital allowances for intangible assets]]" BEPS scheme), have the need to perform a "relevant trade" and "relevant activities" on Irish-based IP, encoded in their legislation, which requires specified employment levels and salary levels (discussed [[Corporation tax in the Republic of Ireland#Low tax economy|here]]), which roughly equates to an "employment tax" of circa 2–3% of profits (based on Apple and Google in Ireland).<ref name="rev1">{{Cite web|title=Intangible Assets Scheme under Section 291A Taxes Consolidation Act 1997|url=https://www.revenue.ie/ga/tax-professionals/historic-material/tax-briefing/2010/tax-briefing-issue-09-2010.pdf|publisher=Irish Revenue|date=2010|access-date=2018-05-18|archive-url=https://web.archive.org/web/20171213200517/https://revenue.ie/ga/tax-professionals/historic-material/tax-briefing/2010/tax-briefing-issue-09-2010.pdf|archive-date=2017-12-13|url-status=dead}}</ref><ref name="cap2">{{cite web|url=https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-09/09-02-05.pdf|title=Capital Allowances for Intangible Assets under section 291A of the Taxes Consolidation Act 1997 (Part 9 / Chapter2)|publisher=Irish Revenue|date=February 2018|access-date=2018-05-18|archive-url=https://web.archive.org/web/20180329120828/https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-09/09-02-05.pdf|archive-date=2018-03-29|url-status=dead}}</ref>

For example, Apple employs 6,000 people in Ireland, mostly in the Apple Hollyhill Cork plant.  The Cork plant is Apple's only self-operated manufacturing plant in the world (i.e. Apple almost always contracts to 3rd party manufacturers).  It is considered a low-technology facility, building iMacs to order by hand, and in this regard is more akin to a global logistics hub for Apple (albeit located on the "island" of Ireland).  No research is carried out in the facility.<ref>{{Cite web|url=https://www.theguardian.com/commentisfree/2016/aug/30/the-guardian-view-on-tax-and-ireland-apple-pay-your-way|title=The Guardian view on tax and Ireland: Apple, pay your way|website=[[TheGuardian.com]]|date=30 August 2016|access-date=19 May 2018|archive-url=https://web.archive.org/web/20180612210924/https://www.theguardian.com/commentisfree/2016/aug/30/the-guardian-view-on-tax-and-ireland-apple-pay-your-way|archive-date=12 June 2018|url-status=live|df=dmy-all}}</ref>  Unusually for a plant, over 700 of the 6,000 employees work from home (the largest remote percentage of any Irish technology company).<ref>{{cite news|url=https://www.independent.ie/business/irish/revealed-eight-facts-you-may-not-know-about-the-apple-irish-plant-36409796.html|title=Revealed Eight facts you may not know about the Apple Irish plant|newspaper=Irish Independent|date=15 December 2017|access-date=19 May 2018|archive-url=https://web.archive.org/web/20180612211114/https://www.independent.ie/business/irish/revealed-eight-facts-you-may-not-know-about-the-apple-irish-plant-36409796.html|archive-date=12 June 2018|url-status=live|df=dmy-all}}</ref><ref name="appleq">{{cite news|url=https://www.theguardian.com/technology/2013/may/29/apple-tax-profits-ireland-cork|title=Apple's multi-billion dollar, low-tax profit hub: Knocknaheeny, Ireland|newspaper=The Guardian|date=29 May 2013|access-date=12 June 2018|archive-url=https://web.archive.org/web/20180612211047/https://www.theguardian.com/technology/2013/may/29/apple-tax-profits-ireland-cork|archive-date=12 June 2018|url-status=live|df=dmy-all}}</ref>

When the EU Commission completed their [[EU illegal State aid case against Apple in Ireland|State aid investigation into Apple]], they found Apple Ireland's ETR for 2004–2014, was 0.005%, on over €100bn of globally sourced, and untaxed, profits.<ref name="europax">{{cite web|url=http://europa.eu/rapid/press-release_IP-16-2923_en.htm|title=State aid: Ireland gave illegal tax benefits to Apple worth up to €13 billion|publisher=EU Commission|date=30 August 2016|access-date=19 May 2018|archive-url=https://web.archive.org/web/20180518162649/http://europa.eu/rapid/press-release_IP-16-2923_en.htm|archive-date=18 May 2018|url-status=live|df=dmy-all}}</ref>  The "employment tax" is, therefore, a modest price to pay for achieving very low taxes on global profits, and it can be mitigated to the extent that the job functions are real and would be needed regardless.<ref>{{Cite web|url=http://www.finfacts.ie/Irish_finance_news/articleDetail.php?Does-Google-Ireland-have-6-000-employees-in-Ireland-649|title=Does Google Ireland really have 6,000 employees in Ireland?|date=17 June 2016|access-date=21 May 2018|archive-url=https://web.archive.org/web/20180416012636/http://www.finfacts.ie/Irish_finance_news/articleDetail.php?Does-Google-Ireland-have-6-000-employees-in-Ireland-649|archive-date=16 April 2018|url-status=dead|df=dmy-all}}</ref>

"Employment taxes" are considered a distinction between modern corporate tax havens, and near-corporate tax havens, like Luxembourg and Hong Kong (who are classed as [[Conduit and Sink OFCs|Sink OFCs]]).  The Netherlands has been introducing new "employment tax" type regulations, to ensure it is seen as a modern corporate tax haven (more like Ireland, Singapore, and the U.K.), than a traditional tax haven (e.g. Hong Kong).<ref name="ned">{{cite news|url=https://www.ft.com/content/ef9b87ac-1af5-11e8-aaca-4574d7dabfb6|title=Dutch set out plan to counter tax-haven reputation|newspaper=Financial Times|date=27 February 2018|access-date=19 May 2018|archive-url=https://web.archive.org/web/20180520053955/https://www.ft.com/content/ef9b87ac-1af5-11e8-aaca-4574d7dabfb6|archive-date=20 May 2018|url-status=live|df=dmy-all}}</ref>

{{quote|The Netherlands is fighting back against its reputation as a tax haven with reforms to make it more difficult for companies to set up without a real business presence. Menno Snel, the Dutch secretary of state for finance, told parliament last week that his government was determined to "overturn the Netherlands' image as a country that makes it easy for multinationals to avoid taxation".|''[[Financial Times]]'', 27 February 2018<ref name="ned"/>}}