asked the Minister for Finance if he will take steps to determine the true profits earned by the oil distributing companies in this country; and whether he considers such profits are adequately taxed.
Ceisteanna—Questions . Oral Answers . - Oil Company Profits .
32.
: As in the case of all other taxpayers it is a matter for the Revenue Commissioners to satisfy themselves as to the true taxable profits of oil distributing companies in this country and tax them on those profits.
The commissioners have advised me that the question of the true taxable profits arising in this country, and in other tax jurisdictions, in the case of multinational companies is a matter which they keep under continuous review. They are, however, satisfied that the profits arising in this country to oil distributing companies are adequately taxed in accordance with the existing law relating to corporation tax on company profits.
: Is the Minister aware of the suggestion that such companies, being members of large multinational groups, tend to fix the profit figure themselves? They can do this by way of the amounts they pay their parent companies for products. Does the Minister think there might be some truth in this suggestion?
: The pricing policies of these multinational companies and the trensfer arrangements are obviously matters which can affect the tax yield of any country in which they operate a base or on an agency basis. This matter has been examined by the OECD from time to time and there are certain recommendations to ensure that there is a balanced and equitable yield to the countries in which they operate.
: Is there any consultation between the Revenue Commissioners here and their counterparts in other countries where these multinationals operate to ensure that money is not switched around to avoid taxation?
: The OECD have a continuing level of consultation in relation to revenue matters of that sort and they take account of this matter, amongst others. I do not wish to overstate the significance of this. Revenue arrangements generally are obviously a matter of concern where there are multinational companies.
: If the Minister had some evidence to suggest that this kind of practice was going on — I do not know if it is but it has been suggested to me — has he any powers to find out the true situation and ensure that proper returns are made?
: It is important that I should state categorically that the Revenue Commissioners are satisfied there is no question of evasion involved in this instance in this country. However, pricing policy has an impact which countries must arrange between themselves. There is no cause for concern but where there are multinational operations it is important that the international tax regime should be able to keep abreast of developments within these companies and this is, in fact, the case.