Seán Sherlock (Cork East, Labour) | Oireachtas source

These amendments propose to insert the words "managed and controlled" into this section of the Bill. The objective appears to be to cause all companies registered in Ireland to be tax-resident in Ireland. As Minister of State in the Department of Jobs, Enterprise and Innovation, I am not in a position to consider the full impact or consequences of any change to tax law. Such an exercise is within the functions of the Minister for Finance.

Additionally, the proposed amendments are illegal both under EU and international law. The provisions would fall foul of the EU law on freedom of establishment, which is a core aspect of EU law. Compliance with this is closely monitored by the European Commission. Ireland has recently been required by the Commission to change a provision of Irish law which required that at least one director of an Irish company be resident in Ireland. This provision would go much further, effectively requiring all management activities to occur within the State. This is clearly a hindrance to cross-border trade within the EU and significantly trammels the ability of a company from another EU member state to establish in Ireland.

Furthermore, this proposal would put Ireland in breach of obligations under double taxation agreements with other countries. This is completely unprecedented and would be highly prejudicial to Irish commerce and Ireland's reputation internationally so it is on that basis that I am not in favour of accepting the amendments.