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EU Issues

Dáil Éireann Debate, Wednesday - 24 February 2021

Wednesday, 24 February 2021

Questions (16)

Gerald Nash

Question:

16. Deputy Ged Nash asked the Tánaiste and Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 37 of 10 February 2021, if Ireland will support the PCBCR proposal if it is tabled and discussed at COMPET later in February 2021; his views on whether the current opposition to the proposal is consistent with Government policy to ensure developing countries benefit from greater transparency in the reporting of multinational corporations as detailed in the international tax strategy (details supplied) in the absence of the required majority at Council level to change the legal basis of the public country by country reporting file and given that the relevant tax officials can provide input at any council configuration; and if he will make a statement on the matter. [9650/21]

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Written answers

Ireland supports transparency and good governance including “Country by Country” (CbC) reporting by MNEs to national tax authorities. As advised in my reply to Parliamentary Question No. 37 of 10 February 2021, the Finance Act 2015 introduced obligations for relevant companies to report to the Revenue Commissioners.

The next COMPET Council meeting will be an Informal Video Conference on 25 February 2021 where the Proposal for Public Country by Country Reporting will be for Policy Debate.

Ireland’s opposition to this file proceeding in COMPET Council is a principled position shared by a number of other Member States reflecting the advice of the Council Legal Service (CLS) that the legal basis for this Proposal should be Taxation (Article 115 of the Treaty on the Functioning of the European Union), and therefore, should be considered by ECOFIN Council. This measure should have the benefit of tax expertise to ensure that it is consistent with existing reporting requirements and, importantly, with the international cooperation and exchange of information arrangements, which are based on confidentiality. Tax experts are best placed to ensure that international efforts to collect income tax from multinational corporations will not be undermined by new measures.

As I stated in my reply of 10 February last, Dáil Éireann adopted a Reasoned Opinion in June 2016 which also shares this view that the proposed Directive is a tax matter and does not meet the principle of subsidiarity. The Reasoned Opinion is available at 2016-06-30_report-on-com-2016-198_en.pdf (oireachtas.ie).

My colleague the Minister for Finance leads on tax policy for Ireland. Ireland has long been a supporter of, and a beneficiary of, tax transparency. Ireland has consistently implemented the necessary measures to ensure we are up to date with international best practices on tax transparency and exchange of information negotiated at the OECD. We have also supported the parallel EU efforts through agreement of the Directive on Administrative Cooperation (DAC) in the field of Taxation, and in December 2020 agreed new provisions for automatic exchange of information in respect of digital platforms. This covers administrative cooperation between EU Member States on tax matters, and automatic exchange of tax rulings, financial account data, and mandatory disclosure of cross-border tax arrangements.

Of the 78 jurisdictions reviewed to date by the Global Forum on Transparency and Exchange of Information for Tax Purposes (OECD), Ireland is one of only a small number of jurisdictions to have been found to be fully compliant with new international best practice.

The current regime for country by country (CbC) reporting gives tax administrations a global picture of the operations of MNE Groups. Tax authorities may use this information to perform high-level transfer pricing risk assessments and to evaluate other Base Erosion and Profit Shifting (BEPS) related risks.

The exchange of CbC Reports requires that jurisdictions must have the necessary laws in place to require Reporting Entities to file a CbC Report; infrastructure to ensure the appropriate confidentiality and data safeguards standards as specified in the Convention on Mutual Administrative Assistance in Tax Matters are met; and a qualifying competent authority agreement must be in effect.

A qualifying competent authority agreement is defined in the BEPS Action 13 Final Report as an agreement that is between authorised representatives of those jurisdictions that are party to an International Agreement (i.e., a Double Tax Agreement, Tax Information Exchange Agreement or the Multilateral Convention for Mutual Administrative Assistance in Tax Matters) and that requires the automatic exchange of CbC Reports between the party jurisdictions.

In most cases, jurisdictions have signed the Multilateral Competent Authority Agreement (“MCAA”) for the exchange of CbC Reports. As at December 2020, 89 jurisdictions (including Ireland) had signed the MCAA and it is open to all jurisdictions to do so. A list of the jurisdictions that have signed up to the MCAA can be found on the OECD website: Activated exchange relationships for Country-by-Country reporting - OECD.

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