Stephen Donnelly (Wicklow, Independent) | Oireachtas source

For the sake of mathematics, we will call it €4 billion. So 1.4% is €56 million. If we are to believe the 11.1%, we must also believe that €56 million is the amount of foregone corporation tax. That is what we would have to believe mathematically. Let us take a made-up example called GIZMO. GIZMO creates a holding company that is either resident here but non-resident for tax purposes as per Professor Barry's example or resident in the Caribbean. GIZMO operating company makes €2 billion in revenue in a given year and has operating costs of €1 billion. Therefore, it has a pre-tax profit of €1 billion. It also pays €1 billion to GIZMO holding company in royalties for the brand or whatever it is. GIZMO operating company attracts €2 billion in revenue, has €1 billion in operating costs and pays zero corporation tax. If I understand correctly, that sort of tax avoidance could not conceivably be included in the effective rate which we as parliamentarians are informed is somewhere between 11% and 12%. Does Professor Barry agree with that?