
Dropbox moves to Ireland for all customers outside of North America - louis-paul
https://www.dropbox.com/help/9063
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mikeyb555
Title is wrong, this is just a tax minimization move and has nothing to do
with data housing.

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s_dev
Ireland often gets a lot of flak from the US and the EU about being a "tax
haven" with similarities drawn to the Isle of Man or the Cayman Islands.

Irelands corporation tax rate is 12.5%, in the US the rate is often cited as
30% and similarly with France and Germany. However the "effective" corporate
tax rate is actually lower than Irelands in many cases because there are many
write offs and loop holes that mean companies rarely pay 30% and much closer
to 8%. These writes offs and loop holes aren't really as available in Ireland
and subsequently mean Irelands tax scheme is more transparent in the sense the
perceived value is closer to the actual value.

It's just a competitive and transparent tax policy that has been in place
since 1960's. A lot of people here and in the media will use this as evidence
that Ireland is a tax haven. I'll concede measures like the Double Irish were
a step too far -- a 12.5% rate isn't. If Dropbox really wanted to I'm sure
they could find plenty of write offs in the UK like Starbucks did. There might
be other factors influencing this decision too though e.g. avoiding the UK
because a Brexit is on the table. Ireland has a better climate for data
centres compared to say the Cayman Islands.

~~~
mikeyb555
There is some good data on this
[http://www.stern.nyu.edu/~adamodar/pc/blog/countryefftaxrate...](http://www.stern.nyu.edu/~adamodar/pc/blog/countryefftaxrates2015.xls)

By the way companies have 6 years to change their structure so the Double
Irish still exists.

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tomkwok
This post[0] in the Dropbox forum points out that Dropbox is suspected of the
intention to minimize tax payable.

[0]:
[https://www.dropboxforum.com/hc/communities/public/questions...](https://www.dropboxforum.com/hc/communities/public/questions/203737955-Transfer-
of-business-services-to-Ireland)

~~~
bigiain
Remember "tax minimization" is legal, prudent, and a fundamental duty of
company officers in these times of "maximise shareholder value" being the
primary and legally mandated goal of a corporation.

"Tax evasion" is crossing over a not very well defined and continually
shifting line - and is illegal.

At the moment, at least from where I see the world here in Australia, all the
"global tech giants" (and mining/resource ones too) are doing a significantly
better job of navigating the shifting tax rules across various national tax
jurisdictions to minimize their tax obligations - than the governments and
bureaucracies are doing of collecting "fair" taxes from them. Our local
popular press is full of stories of FaceBook/Google/Apple paying zero tax in
Australia because they can structure their invoicing/payments to and from
different parts of the same global corporate entity – in entirely legal ways
that result in zero tax owing in Australia.

I'd think less of Dropbox's senior management and advisor team if they weren't
trying to take advantage of the same loopholes.

It's "Modern Corporation 101" grade stuff - "Maximise shareholder value by
whatever means won't put the company directors in jail. Don't talk about
ethics or fairness or duty to society (except in the Marketing Department and
advertising). Talk about duty to shareholders and what's close enough to
technically legal that our lawyers will sign off on it."

~~~
tocf
You're exactly right. While we look at this stuff as despicable, because it
really is, we can't blame the companies. Except ... we can, right? They're the
ones who have manipulated the tax codes, right? They're practically writing
the laws, right? Ultimately though, the politicians are the ones who are
passing the laws. They're the ones who are being bribed, excuse me, funded, by
corporations and the wealthy. To blame corporations for taking every advantage
of the system, to manipulate it in whatever way possible, is silly. Capitalism
rewards innovation. It rewards plugging the holes that cost money (and taxes
can be quite a big hole). These can be great benefits to everyone to some
extent, but they also eventually lead to buying out competitors which reduces
competition, which can result in big, lazy companies who'd rather legislate
than innovate - I'm looking at you, Cable Company and Telephone Company, or
the Media conglomerates. That's what we have the world over.

Maybe it's just me, but for me, the problem is our political system - it's not
designed to withstand these corrupting forces. Some countries deal with it
slightly better, but barely just.

I like competitive capitalism. I like democracy, and even the idea of a
representative democracy. But they don't play well together when you have the
capitalists ultimately deciding who gets to represent the people, and then
those representatives bending in every which way to make things easier for
their funders. When you have a system that rewards bribery, or has in its
place a revolving door between legislators and business, you're going to have
these effects. The solution to this I think is really rather simple, but I'll
leave it as an exercise to the reader.

~~~
Nevermark
Why is tax minimization despicable? Countries should compete on all levels
including economic efficiencies. Lower taxes is higher efficiency and an
admirable achievement for a government.

What is despicable is that we all pay more taxes than our governments should
actually need if they spent the money they took from us wisely.

~~~
capisce
Countries don't just compete on taxes by providing the same service more
efficiently, but also by providing a _worse_ service to their citizens. It's a
race to the bottom.

~~~
shaftoe
Perhaps it's worthwhile to have a mild counterbalance to the tendency to spend
an ever increasing amount of other people's money.

It's not like "better service" is a driving force behind any government, ever.

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stirlo
The clear point of this is not to protect from NSA/US Courts but to minimise
tax. I'm not sure why they never setup out of Ireland in the first place,
every other US company with international revenues has already.

In addition unless Microsoft wins its appeal US courts have ruled that a US
company eg: Dropbox can be forced to provide any data they have even if it is
outside the US

~~~
xnull2guest
Right. I mean, Condolezza Rice is on the board of Dropbox. If there's a
company that is going to have pressure from shareholders to make data
available to the government it's going to be Dropbox.

~~~
mojuba
If she doesn't work for the govt. anymore why would she do that?

~~~
ProAm
Money,

~~~
bigiain
I doubt it - I'm reasonably sure 50% less or 1000% more money wouldn't make a
substantial difference to her or her families way of life - she'd notice, but
mostly in a "using dollars to keep score" kind of way.

I'd suggest "ideology" is a much more powerful motivator here.

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fred256
Doesn't say it moves the data, just that the legal entity providing service is
the Irish subsidiary.

~~~
nosir33
In terms of alternatives, AWS WorkDocs provides data storage in Ireland (and
the US, Singapore and Australia).

~~~
bigiain
But since Amazon has offices in the USA, the NSA considers all AWS hosted data
in whatever country the Amazon operated data center is located in, to be under
US jurisdiction.

I had a client who pulled all their (encrypted) data off the Ninefold cloud
(Ninefold were at the time a fully Australian owned and hosted company) when
they leased data center space and opened an office in CA – due to data
sovereignty concerns.

~~~
notatoad
Isn't Dropbox also entirely aws-hosted?

~~~
bigiain
Yep, and has exactly the same "company officers residing in the US" exposure
to the NSA and any of the agencies fighting the war on
[drugs|terrorism|pedos|political-rivals] getting closed or open court warrants
with or without gag orders.

In fact Dropbox is doubly at risk, law enforcement or national security could
target either (or both) Dropbox themselves - go straight to Amazon to get
access at hypervisor level to their entire infrastructure.

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Darragh_Hayes
As an Irish person I'm happy about this. As others have already mentioned,
we've got a massive number (relative to our country's size) of fortune tech
companies setting up camp here for a number of reasons.

12.5℅ corporation tax. We're not a tax haven, our rate is just at a sweeter
spot. This policy was introduced by an taoiseach (prime minister) Sean Lemass
during the 60's to stimulate economic recovery from one of the worst
recessions we ever faced. The goal was to attract foreign investment and in
particular from American companies that wanted to get a foothold in Europe.
This guy is sort of revered in Ireland and everyone that takes Junior
Certificate History (ages 12-15ish) learns about him. He's a pretty
interesting leader because he was almost singlehandedly responsible for
developing our country into a modern, global economy through various policies,
plans and schemes.

European Law, I'm no expert in law but as far as I know our data protection
laws are well established. Let's put it this way, our own government
definitely isn't trying to keep track of your visits to the toilet. Although
we're paranoid that the US probably is, or at least they want to!

Climate - funnily enough our famously terrible weather has an upside. The cost
of cooling a data centre is cheaper. Our country isn't incredibly cold but it
never really gets hot here either. Temperatures throughout the year are
relatively stable.

As a CS student with only 1 year left to graduate I couldn't be happier with
the 'mini tech bubble' we're experiencing. It's practically the only sector
that's seeing significant growth and wage increases in the last few years. The
economic crash in 2008 had a severe effect on the country as a whole. Fast
forward to today - employment in software development, engineering and other
related fields is being created quicker than they can find suitable
candidates. I'm happy knowing that while so many other young people are being
forced to immigrate, our tech sector is so saturated with jobs that CS grads
like myself are being headhunted.

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manigandham
No data is moving at all, just a change in company to Ireland subsidiary.

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jacquesm
Twitter did the same a few days ago as announced on their blog.

[https://support.twitter.com/articles/20172527#](https://support.twitter.com/articles/20172527#)

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sergers
My assumption they funneling money through Ireland through knowledge based
capital tax breaks, after Ireland said they abolishing double Irish last year
which many large fortune 50 companies utilized in past

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similanblu
Great. Since there is no international tax-agreement between Ireland and my
country, now my startup company has to start paying 7% VAT for Dropbox in
their place. (In addition to 7% VAT we already pay for Facebook ads and Adobe
Creative Cloud, which recently moved to Ireland too)

Gee, if only Microsoft OneDrive would have a decent Linux client.

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skuhn
The user data is absolutely not stored in Ireland.

~~~
Nevermark
Exactly, its up in the clouds. Seven miles up to avoid national legal issues.

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angry_octet
I couldn't help thinking BIGGEST RSYNC EVER. And, what is the bandwidth of a
747-8 full of 4TB disk? (140,000kg/0.6kg = 233,333 disks, downrate to 200,000
for packaging, 800,000TB. Approx flight time 10h SFO-DUB, load/unload, say
15h; 86400s. ~9TB/s. So pretty fast.

~~~
angry_octet
Come on, a down vote for trying to bring the conversation back to something
technically interesting instead of angst about NSA snooping and tax avoidance?
For shame, you should have your geek badge confiscated.

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fuddle
Its strange that they don't give a reason for the move.

~~~
jacquesm
EU privacy laws, taxation.

~~~
darklajid
In that order?

~~~
jacquesm
One would hope...

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mp3geek
I wonder how this will affect speed and latiency if you're on the other side
of the world (like NZ and Australia).

~~~
bigiain
Apart from that point that so far as I can tell, this is purely about what
country code is used in a billing database record and it's tax implications,
rather than any large scale network reconfiguration changes - but I doubt many
people have a use case where the difference between 50ms or 300ms latency for
Dropbox would make any difference at all. For most people I'm pretty sure the
speed of "the last mile" is the fundamental limiting factor for their
bandwidth.

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junto
I doubt this anything to do with privacy. I'm already in the process if moving
to Spideroak.

