asked the Minister for Finance whether the Government agrees with the Parliamentary Assembly of the Council of Europe that the present structure of co-operation designed to fight international tax avoidance and evasion is not sufficiently complete and coherent within Europe and whether the Government envisages supporting the initiative for the elaboration of a draft European Convention on the lines of paragraph 10 of the Assembly Recommendation 833 to which all Council of Europe Member States, and possibly others, could become parties thus supplementing existing co-operation in the framework of the European Community; if the Government agree with the Assembly that appropriate international action should be taken with a view to making it more difficult for firms and private individuals to use tax haven countries inside or outside Europe for tax avoidance purposes; and, if so, if it is willing to support an initiative to this effect in the Council of Europe or another appropriate international framework; and the Government's attitude to the various proposals put forward in paragraph 11 of Recommendation 833.
Written Answers. - International Tax Avoidance and Evasion.
Since the effects of tax avoidance and evasion on the international plane are impossible to quantify, the extent to which this country's interest would be served by participating in international action as envisaged in Recommendation 833 to counteract such activities must in large measure be a matter of conjecture. On the question of principle involved in such participation, there is, in the 1963 and 1977 versions of the OECD model convention for the avoidance of double taxation on income and capital, an article which provides for the exchange of information between partner countries for the purpose of countering fiscal evasion and avoidance. This country accepted that article without reservation.
Irish representatives have actively participated in the work of the OECD Committee on Fiscal Affairs which has been concerning itself for some time with tax avoidance and evasion. This country has been, and will continue to be, involved as a member state of the EEC in activities at Community level designed to counter avoidance and evasion. A recent example of the outcome of such activities is the directive on mutual assistance in the field of direct taxation.
As regards paragraphs 10 and 11 of Recommendation 833, the Deputy will be aware that at the meeting of Ministers' deputies of the Council of Europe on 6—8 June, 1978, concern was expressed that the Council should not become involved in what was then described as the risk of duplication with the work of OECD. The Government see no reason to dissent from that view. They also share the doubts expressed at the meeting as to the practicability, in the light of the findings of an OECD working party, of concluding a multilateral agreement in preference to bilateral agreements.
In considering the proposals in Recommendation 833, the overriding concern of the Government will be to avoid entering voluntarily into any specific commitment to the adoption of measures which could have adverse effects on the economy.