Mr. Pascal Saint-Amans:

The government part is quite easy to understand. Not just Ireland but all countries of the world do not collect some taxes that they should collect. I say "they should collect" because they never intended to let that tax go, or if they did let it go, it was implicitly, and they now think this time is over. Therefore, the position of governments is straightforward.

For companies, there are two dimensions. The first, which is quite obvious, is that because companies are exposed to international transactions and, therefore, can use the deficiencies which may exist in the international framework, one cannot give them a competitive advantage compared to purely domestic businesses which cannot do that. When one looks at benchmarks in many countries, one can see there is a significant gap between the effective tax rate of multinationals and purely domestic companies. This is a distortion which is not good for investment.

Second, for companies, double non-taxation actually undermines the international consensus on the need to eliminate double taxation. Where there is such a situation, at some point one may face the risk of some countries walking away from the consensus and introducing unilateral measures to protect their tax bases without trying to co-operate with the others. This would be very bad because it would restore double taxation and might even, in a worst case scenario, end with triple, quadruple or multiple taxation.

Finally, for the taxpayers, given the fact that some do not pay what they should pay if the laws were designed in a way that ensured there were no loopholes - in talking about the law, I am talking about the international tax architecture - when one does not collect what one has to collect, it is the others who will have to pay it, that is, individuals or other businesses. This is why it is not good for ordinary taxpayers. In addition, it undermines confidence in the tax system and, therefore, the perception that the tax system is unfair results in general in lower compliance and makes the life of tax commissioners much more difficult.