Dáil Éireann Debate, Tuesday - 7 March 2023
106. Deputy Gino Kenny asked the Minister for Finance if he is aware that leading global tax researchers from the University of California, Berkeley and the University of Copenhagen (details supplied) have identified Ireland as a major tax haven and estimate that Ireland artificially attracts €130 billion in profits from other countries and gains €7.2 billion in tax revenue from this profit shifting; and if he will make a statement on the matter. [11372/23]
Amharc ar fhreagraI understand that the Deputy is referring to a report "The Missing Profits of Nations" that examines the attribution of profits by multinational enterprises (MNEs) around the world.
The central analysis of the paper looks at links between the level of profit booked, and the level of wages paid in a country. This creates a misleading impression that corporate profits are or should be directly linked to wage levels rather than to the outputs of investment in all income generating activities such as investment in R&D, intangible assets, capital intensive machinery and investment in staff etc. A small country with high levels of high value adding FDI relative to the size of the domestic economy will of course, appear like an outlier in this type of analysis.
Ireland has a competitive corporation tax rate, an attractive and stable tax regime and a strong reputation and commitment to transparency. Ireland's tax regime is designed to encourage the location of real, substantive and high-value adding investment in the country. This is evidenced by the substantial number of MNEs who have chosen Ireland as their home and the hundreds of thousands of both direct and indirect jobs they contribute to the economy.
Ireland is a strong supporter of the OECD BEPS process and has a track record on taking action on tax planning and in implementing commitments made at international level to support tax transparency including through the implementation of the EU Anti-Tax Avoidance Directives.
Furthermore, Ireland fully supports the two pillared solution to address the challenges brought about by the digitalisation of the economy and is actively engaged at the OECD to follow through on that agreement. The EU Minimum Tax Directive was agreed in December and will ensure that large MNEs will pay a minimum effective tax rate of 15%. It is my intention to bring forward legislation in this years Finance Bill to transpose Directive into domestic legislation before the end of the year.
