Dáil Éireann Debate, Tuesday - 18 December 2018
158. Deputy Michael McGrath asked the Minister for Finance if he has carried out an assessment of the extent to which multinational corporations not headquartered here are booking in Ireland income from sales made to non-Irish consumers and offsetting Irish profit taxes on this sales income through Irish tax incentives for intellectual property; and if he will make a statement on the matter. [53374/18]
View answerAs the Deputy will be aware, the structure of the Irish corporation tax regime corresponds to international norms. A company that is resident in the State is taxed on its worldwide income while a company that is not resident in the State, but which carries on a trade in the State through a branch or agency in the State, is taxed on its trading income arising from the branch or agency. The worldwide trading income of a company resident in the State may include income from sales to both Irish and non-Irish customers. Such trading income is, in accordance with our tax rules, properly subject to tax in the State. There is no requirement for companies to specifically distinguish their trading profits between Irish and non-Irish sales and, as such, their trading profits cannot be separately ascertained.
As the Deputy is aware there is a scheme of relief in the form of capital allowances available to companies that incur capital expenditure on intangible assets for the purposes of a trade. The scheme applies to intangible assets which are recognised as such under generally accepted accounting practice and which are listed as a “specified intangible asset” in section 291A of the Taxes Consolidation Act 1997. An important feature of the relief is that the allowances may only be offset against trading income generated from the intangible assets and, for capital expenditure incurred on or after 11 October 2017, only against up to 80% of that income.
I have been advised by Revenue that, in relation to a company’s trading income generated from intangible assets, it is not possible to provide a breakdown as between amounts attributable to Irish and non-Irish sales because there is no requirement or basis for companies to provide this information.
