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Corporation Tax

Dáil Éireann Debate, Thursday - 16 July 2020

Thursday, 16 July 2020

Questions (39, 81)

Mairéad Farrell

Question:

39. Deputy Mairéad Farrell asked the Minister for Finance if his attention has been drawn to the recent OECD report on corporate tax statistics published 8 July 2020 (details supplied); his plans to enact measures to stop businesses registered here that are engaging in corporate tax abuse from availing of Covid-19 financial supports; and if he will make a statement on the matter. [16145/20]

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Mairéad Farrell

Question:

81. Deputy Mairéad Farrell asked the Minister for Finance if his attention has been drawn to the new OECD report on corporate tax statistics published on 8 July 2020 (details supplied); his plans to enact measures to stop businesses registered here engaging in corporate tax abuse from availing of Covid-19 financial supports; and if he will make a statement on the matter. [16347/20]

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Written answers

I propose to take Questions Nos. 39 and 81 together.

I welcome the release of the OECD’s Corporate Tax Statistics publication which is an important source of information on corporation tax globally. I also welcome the release of the Country by Country Reporting database published for the first time with the report. Publishing this aggregate data strikes an appropriate balance between the need for tax transparency and respecting taxpayer confidentiality.

This data is useful for high-level analysis of the risks associated with Base Erosion and Profit Shifting. An appreciation of these risks is paramount in maintaining a stable international corporation tax framework, a policy priority to which Ireland remains fully committed.

It is my understanding that the detail supplied by the Deputy refers to some analysis carried out by an NGO on foot of the publication of the data although the figures indicated by the Deputy appear to confound two different concepts, namely volumes of multinational profit shifting and the estimated tax revenue losses arising from such activity. In this respect it is important to note that the OECD data itself is the subject of many caveats, as outlined extensively in the accompanying Disclaimer document released by the OECD. This points to a range of technical issues with the data and warns against making inferences. Furthermore, the available data was compiled from a limited set of country data.

Importantly, the data relate to 2016. As a result, they pre-date very significant 2017 US tax reform measures. They also fail to capture the range of anti-BEPS efforts taken by Ireland and other countries since 2016, including the introduction of controlled foreign corporation rules, anti-hybrid mismatch rules, and amended transfer pricing rules.

Nonetheless, this publication delivers on a key commitment under the OECD’s Base Erosion and Profit Shifting (BEPS) Action 13 Report.

In respect of the final part of the Deputy's question, Ireland, like all countries, has attached various conditions to the eligibility for COVID-19 supports. As the public health restrictions are eased, the challenge for the economy and enterprises is evolving. As set out in the Programme for Government, the July Jobs Initiative will address the future of the various key COVID-19 supports.

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