Dáil Éireann Debate, Tuesday - 21 November 2017
132. Deputy Pearse Doherty asked the Minister for Finance his plans to commission a report on the way in which the State's tax policies and treaties affect developing countries; and if he will make a statement on the matter. [48708/17]
View answerIreland, in accordance with our International Tax Strategy, is committed to engaging constructively and respectfully with developing countries in relation to tax matters, and to supporting such countries in raising domestic tax revenues in ways that are more efficient, that promote good governance and equitable development, and that can allow them to eventually exit from a dependence on official development assistance.
As part of this commitment the Department of Finance commissioned the International Bureau for Fiscal Documentation to undertake a spillover analysis to look at the possible effects of the Irish tax system on developing economies. Ireland was only the second country in the world to undertake such an analysis. The Spillover Analysis was published on Budget Day in October 2015.
The statistical analysis identified very limited flows of capital and trade between Ireland and developing countries, indicating a small likelihood of spillovers from the Irish tax system. Limited flows make it difficult to draw firm conclusions, but there are some indications that Ireland’s treaties with developing countries may have the potential to increase trade flows, possibly in particular in trade of differentiated goods where treaty provisions can enhance the alignment of tax rules.
The analysis of Ireland’s double tax agreement network looked at a range of treaty provisions and compared Ireland’s treaties to other treaties concluded by those developing countries. The analysis was broadly positive in respect of Ireland’s treaty network with developing countries. Some points of concern in relation to two older treaties were noted, but new treaties with these countries have already been agreed and ratified.
The review of domestic tax legislation examined provisions relevant to multi-national trade such as withholding taxes, and the influence of multi-lateral agreements such as EU Directives on these provisions. The outcomes of this analysis were again broadly positive, and it also noted the work ongoing internationally to update the anti-abuse provisions in multi-lateral agreements.
While there is a regular review of Ireland’s International Tax Strategy, there are no immediate plans to repeat the spillover analysis.
It should also be noted that earlier this year, Ireland signed up to the Addis Tax Initiative which commits us to doubling our aid spending on tax and development initiatives by 2020.
