Mr. Pascal Saint-Amans:

There are two aspects to the Chairman's question. One is the rates that can be implemented in one country and the other aspect is the rate that can be targeted at what we tax people call patent boxes, to which the Chairman referred in the context of the UK. On the first aspect, since the late 1990s work has been carried out in this area. This area was then called the harmful tax practices work or unfair tax competition work and the consensus among OECD countries has been that countries are sovereign to decide their own tax rates, that fair tax competition is not the problem and, as a result, it means that countries should decide on their corporate income tax rates. Moreover, other work we have carried out on the tax policy analysis area has shown that the OECD favours rather low direct taxes, rather than high direct taxes, because they are pro-growth. What was highlighted at the end of the 1990s, and the rules have not changed since, are that harmful tax practices are to be condemned and harmful tax practices are those designed to attract mobile investment by being ring-fenced and also by offering a lack of transparency. This means that the 12.5% rate, which we understand is at the cornerstone of the Irish economy, is not questioned.

The other part of the Chairman's question dealing with patent boxes needs to be looked at through the same angle, namely, are these practices harmful and what will be the criteria, namely, those included in the 1998 report, which was adopted by all OECD countries and which they consider to be the rules. Clearly, action 4 or 5 - the best action plan we have come up with publicly on 19 July - deals with harmful tax practices, the need to reinvigorate that work and to look at the regimes. Obviously patent boxes are regimes which will be looked at but they will be considered based on the existing criteria. If they are deemed to be harmful because they have some features which would make them harmful, they will considered in terms of being dismantled, but if they are not harmful, they will be maintained by the governments which installed them.