Mr. Gary Tobin:

I thank Deputy McGrath for those interesting questions. I will deal with the second question first. The Deputy is correct that a number of European countries are in the process of introducing ring-fenced regimes for certain types of income. In the case of the UK, it is planning to introduce a 10% regime by 2018 but there are a number of other jurisdictions that have those regimes in place. The Netherlands has what it calls an innovation box and there is also one in Cyprus and Spain. It is a matter of public record that a number of countries have raised concerns around some of those regimes. Even the German Finance Minister, Mr. Schäuble went on public record essentially criticising those types of regime. He said that he would not particularly be in favour of them. It is also a matter of public record that some of those regimes are being examined at a European level in terms of their appropriateness. We are certainly aware of those regimes but given the question mark that is over the patent box regimes internationally at the moment it is questionable whether this country should be thinking about introducing such a regime when it is so controversial. I would expect that when those discussions happen at a European level it may become clearer whether such regimes are regarded as fair tax competition. We will wait and see. We are certainly aware of what is going on and are following developments. It is one tax controversy that at the moment we are not involved in and we do not have any desire to get involved in it.

In regard to other jurisdictions that have two-tier structures, again, I emphasise that the whole issue is around mismatches between different tax codes. I would prefer not to name countries but there are other two-tier structures which do not involve this country. They are used and we must be mindful that if we make a change to our tax regime we will not solve the problem of two-tier structures. It is an international issue. Part of it is around adopting the appropriate transfer price for extremely valuable intellectual property. Those kinds of decisions must be taken at an international level and essentially by the OECD. That is why it is open to question as to whether unilateral action or multilateral action is the appropriate way to go. I hope I have answered the question.