Micheál Martin
Question:120. Deputy Micheál Martin asked the Minister for Finance if he and his officials discussed the recent report from a body (details supplied); and if he will make a statement on the matter. [46164/19]
View answerTuesday, 12 November 2019
Questions (120, 121)
Micheál Martin
Question:121. Deputy Micheál Martin asked the Minister for Finance his views on the warnings by a person (details supplied) regarding GDP data for Ireland that concluded that such are the distortions in tech profits, the proposed OECD BEPS tax reforms do not go far enough to address the anomalies; and if he will make a statement on the matter. [46165/19]
View answerWritten answers
I propose to take Questions Nos. 120 and 121 together.
I understand that the Deputy is referring to the blog article by Mr Brad Setser, which was published on the website of the Council on Foreign Relations.
Ireland is a small country and large transactions by multinational enterprises can have a disproportionate impact on our statistics when compared to the effect of transactions of a similar magnitude would have in a larger economy.
Indeed, it has been widely acknowledged that economic activity in Ireland tends to be over-estimated by GDP. For this reason, an alternative measure known as modified GNI (GNI*) has been developed by the CSO, which excludes the globalisation effects that can distort measurements of Irish output. These effects relate to the imports of R&D, trade in intellectual property, net factor income of re-domiciled multinational enterprises and features of the aircraft leasing sector.
It is important to acknowledge that the OECD BEPS process has achieved much in curtailing aggressive tax planning. However, as mentioned by Mr Setser, this very success has been a factor in encouraging companies to move assets out of zero tax jurisdictions to places, such as Ireland, where they have real substantive operations, and this has contributed to some of the distortions in our national accounts.
While much has been achieved, I recognise that further change to the international tax framework is necessary to ensure that we reach a stable global consensus for how and where companies should be taxed.
My officials and I continue to engage positively in the discussions at the OECD, and I remain open to solutions which respect our right to compete fairly and which respect the legitimacy of Ireland’s longstanding 12.5% corporate tax rate.