Tuesday, 2 July 2013

Questions (75)

Kevin Humphreys

Question:

75. Deputy Kevin Humphreys asked the Minister for Finance if he will outline, in relation to the proposals on taxation in the Lough Erne declaration made by the G8 in June and the call for greater policy coherence in the recent Irish Aid policy paper One World, One Future, the way Ireland is planning to respond to the call for developed countries to help developing countries collect the taxes owing to them, and for legislation to bring an end to tax offshoring; and if he will make a statement on the matter. [31794/13]

View answer

Written answers (Question to Finance)

I have referred, in answers to other Parliamentary Questions, to work done under the auspices of the OECD in relation to assistance to developing countries in tax matters. In particular, the tax and development programme implemented by the OECD's Committee on Fiscal Affairs (CFA) and Development Assistance Committee (DAC) is concerned with supporting effective tax systems in developing countries. Notwithstanding our own severe budgetary challenges resulting from the international financial crisis, Ireland, through Irish Aid, is contributing to the funding of this work on tax and development. The OECD’s Tax Inspectors Without Borders (TIWB) project is an important initiative under the tax and development programme which is directly concerned with helping developing countries to collect their taxes.

To improve tax transparency and compliance in developing countries, civil society groups have for some time now been campaigning for multinational enterprises to publicly report on a country-by-country basis in their annual financial statements. Proponents of published country-by-country reporting suggest this would discourage profit-shifting between countries. Ireland supports the ongoing work at OECD level on tax and development issues, including work on country-by-country reporting. While supporting the principle of country-by-country reporting our position is that it should be rolled out carefully on a phased basis with an appropriate impact assessment. Ireland has given country-by-country reporting a significant boost by negotiating its extension to the financial services sector under our EU Presidency.

Effective exchange of information is a critical tool in ensuring that countries are able to collect taxes owing to them. Ireland has now fully signed up to the joint Council of Europe/OECD Convention on Mutual Administrative Assistance in Tax Matters. Ireland’s instruments of ratification were deposited on 29 May of this year and the Convention/Protocol will enter into force on 1 September 2013. The deputy may wish to note, in particular, that an amending Protocol extends participation in this Convention to developing countries. This enables developing countries to access exchange of information with an ever-increasing range of countries without having to incur the expense of negotiating agreements with each of the countries concerned individually.