Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

These are discussions we have at ECOFIN meetings constantly. The issues are exactly the same. We had a very useful discussion in Lithuania on the basis of the OECD report and on how we move from the current double taxation agreements to the automatic-exchange-of-information agreements, which was discussed before this committee in the past. Countries raised at the meeting the view that if our revenue system gives information on individuals and companies automatically to the US IRS, for instance, can we be certain that the IRS, which operates in a federal system, has the same breadth and capability as our system? Can one compare the IRS to the Office of the Revenue Commissioners, for instance? It is a genuine practical issue. If one is giving information and expecting information in return, one must ask whether both systems have the same reach. These are very complicated issues by virtue of the fact that we not only have different rates across the board, but also different systems and applications of those systems.

The Deputy’s ambition is the same as that of the Government, namely, to ensure the effective tax rate is as close as possible to the actual tax rate. We share that ambition entirely because it is to ensure the total amount in tax taken on the corporate side increases as there are increases in economic activity. I am not sure whether I gave the relevant statistics to the committee earlier. We were taking €6.4 billion in 2007. Last year, 2012, it was down to €4.2 billion, and this year it will be €4.3 billion. We anticipate it will be €4.38 at the end of 2014. The ambition of us all is to get more under this particular subhead.

The question of higher-income earners, as raised by Deputy Doherty, constitutes the very point of difference. We know who the higher-income earners domiciled in this country are and, by and large, we know their income. We know, broadly speaking, what they pay in tax given our effective tax rates. However, can one say this genuinely about large-scale multinationals that operate across multiple countries and tax regimes? The most recent information from the Revenue Commissioners, as I understand it, is that 95% of the top 100 companies in this country are multinationals. They pay €2.8 billion. Effectively, 68% of the total in corporation tax is paid by the top 100 companies, as one would expect. I would not like members to leave this meeting in the belief that the companies are in some way not paying a contribution to the Irish Exchequer under the existing tax code because they are. This is evidenced in the Revenue data.

I repeat my question to my colleagues opposite: what parts of the Revenue information published annually do they have a difficulty with? Perhaps this is related to the point Deputy Boyd Barrett was raising when he asked how we go from €70 billion down to €41 billion and then produce the effective rate of 10.3% based on the amount of tax on profits paid. There are three subheads that result in the reduction. Capital allowances account for €12 billion approximately. Loss relief accounts for approximately €6.5 billion, and approximately €11.5 billion is related to trade charges or royalties. Earlier, I referred to the IP issue. These are all reductions on the total tax bill because they are reckonable expenses, similar to those that any other business would have. If the Deputy requires further information from the Office of the Revenue Commissioners, perhaps he needs to get it from it.

I appreciate Deputy Doherty's amendment because it allows us to debate this issue, which we would not otherwise have had an opportunity to debate. I fully understand why he tabled it. On the Deputy's comments on having another form of statistics, there is no agreement in this area, and that is why the OECD model and a movement in that direction involving Ireland playing its role with other states in the European Union comprise the only way through in arriving at some appreciable outcome. We have absolutely nothing to hide here. We have a very clean and clear corporate tax rate of 12.5%. Irrespective of the effective tax rates mentioned in the various reports that are issued, ours is a hell of a lot closer to that which other countries are charging in terms of all the discounts, provincial or otherwise, that they can factor into their tax systems. If we need more information on this, it will be provided. The OECD is the way to go because it provides the gold standard in terms of tax information exchange, as I have said this committee on numerous occasions.