Dáil Éireann Debate, Tuesday - 21 September 2021
212. Deputy Bernard J. Durkan asked the Minister for Finance the reason some institutions based outside Ireland but within the EU persist in referring to this jurisdiction as a tax haven; the action he can take to address and rebut such an allegation; and if he will make a statement on the matter. [45158/21]
Amharc ar fhreagraMeasured by any objective international criterion, Ireland cannot be defined as a tax haven.
Ireland’s corporate tax policy, and broader industrial strategy, has consistently focused on attracting real and substantive investment that brings jobs. Our competitive but fair corporation tax rate is just one small part of the story. This complements our highly educated workforce, making Ireland an attractive EU base for businesses.
I am aware of a recent publication carried out by a research laboratory which has referred to seventeen jurisdictions, including Ireland, as tax havens used by European banks. I do not accept the label attributed to Ireland and would question the unique methodology used to arrive at this position.
The paper indicates that the identification of countries in the tax haven list relies on two parameters. Firstly, country-specific profit per employee of the banks in question with a focus on jurisdictions with high profit per employee. Secondly, a country-specific effective tax rate is used, to measure the tax rate applied on profits. An arbitrary 20% of countries with highest profits per employee is coupled with an arbitrary effective tax rate of lower than 15%.
Given our headline rate of corporation tax is a low but substantial rate of 12.5% it would appear to make Ireland, or indeed anyone with a rate of 15% or below, the target of such an arbitrary list of tax havens.
I believe that small countries, and Ireland is one of them, need to be able to use tax policy as a legitimate lever to compensate for advantages of scale, location, resources, industrial heritage and the real, material and persistent advantage enjoyed by larger countries.
