Financial transparency vital for accountable democracy

The United States tax authorities have recently reported that foreign corporations, incorporated in Ireland but controlled by 666 American corporations, reported current earnings and profits, before tax, of $87.12 billion for 2010 and that tax on these earnings amounted to $2.9bn (3.3%).

The corresponding earnings of this cohort for 2004 were €24.78bn on which the tax liability was €1.6bn (6.4%). The scale of these earnings was equivalent to 12% of our GDP in 2004 and 42% of our GDP in 2010.

By way of comparison, the current earnings and profits in 2010 of over 3,200 American controlled foreign corporations incorporated in France and Germany was $31.4bn which incurred a tax liability of $5.1bn (16.2%). The earning of over 3,300 American controlled corporations in the United Kingdom was $20bn lower in 2010 than the earnings of their Irish counterparts, but the tax wedge was $9.1bn (13.4%).