Teknovis

I heard of an interesting situation in a small Irish technology company recently. The company is successful, and it generates a small profit. In previous years some of this profit was redistributed to employees in the form of a bonus.

However, this year management decided to do a cost-benefit analysis on these bonuses. It was not a surprise that they found it was very bad value, due to the punitive income tax rates in Ireland. See Bruton criticises high income tax rates for an explanation, and bear in mind that this does not consider employer’s PRSI. There is roughly 4€ of benefit to the employee for every 10€ spent by the company.

So instead the management allowed employees to choose from a list of alternative incentives that would not incur a tax liability. Some of these incentives included:

• Additional annual leave
• Additional investment in informal employee education and training
  • Travel and accommodation for attending foreign trade shows and conferences
  • Purchasing of new hardware relating to the business (smart phones, tablets, laptops)
• Improved office facilities
  • Free food
  • The creation of a recreational zone
• Donations to charities of the employees’ choosing

There were more, but I cannot remember them all now.

Unsurprisingly, not even one person choose to receive a bonus! So now the government is not going to get even a single cent of income tax from the potential bonus pool. Furthermore, this means that the company’s total income tax bill this year will be the lowest in many years.

So what is the moral of this story? There are two!

Firstly, there are many rewards that employers can offer employees that have a one-to-one cost-benefit balance. It is just a matter of thinking creatively!

Secondly, that by continually increasing income tax rates the government is taking a larger percentage of a smaller amount of money!

Tags: Ireland, Tax

I came across this word cloud depicting the most common passwords a while ago (click image to see larger version):

Common Passwords (Copyright Unknown)

Unfortunately, I cannot remember the source :(

The EU Commissioner for Digital Agenda, Neelie Kroes, gave a very interesting speech recently covering her vision of a single telecoms market in the EU. Some of her key points include:

… we need a different and very political discussion about delivering a telecoms single market.

…

I want you to be able to go back to your constituents and say that you were able to end mobile roaming costs.

…

It is my belief that we can deliver such a package – this full, final, package – around Easter 2014. Imagine that.

…

So, if you believe in the single market; if you believe in a strong Europe that makes a practical difference to each citizen’s life – then Believe. In. This.

The full text is available in Speech: The politics of the completing the telecoms single market, and you can watch it being delivered in I will fight with my last breath”: why we need a telecoms single market.

I have believed in a single telecoms market within the EU for a long time Ms. Kroes! Indeed, I do not know why it did not happen a long time ago! It seems ridiculous to me that I am charged different amounts for the same service depending on where I am located within a single market!

The A350 had its first test flight today – see Airbus A350 successfully completes maiden test flight. The video in Airbus A350 Rolls Royce XWB engine: Close up look is also worth watching.

Congratulations Airbus!!!

Tags: Airbus