Mr. Brian Keegan:

I sometimes think the public debate on corporation tax, in particular multinational corporation tax, is a little like having a critique of the Irish education system based on the student who gets ten A1s. It is the outlier examples that are taken all the time and sometimes the point can be missed. Sometimes the dog is given a bad name.

The Chairman made reference to the Senate hearings. I wish to make a few points in that regard simply because the sub-committee chaired by Senator McCain made a number of specific recommendations. It made five recommendations, three of which, in the context of a well known multinational with operations in Ireland, had to do with changing US domestic tax law, while the other two had to do with empowering the US inland revenue service to make more inquiries of its own taxpayers. Even though the entire focus and the publicity surrounding the Senate investigation had to do with Ireland, the prominence of a major multinational and what it was doing in Ireland, the actual recommendations made by the US Senate committee had to do with US law and practice. That is what it saw as fixing the problem and a useful point to remember.

While I do not wish to constantly harp back, I keep coming back to the point that there is no such thing as international taxation. Taxpayers pay taxes to the sovereign governments where they are resident.

However much one might look at the overall vista, declare one is not entirely happy with what is going on and would like to change it, it is very difficult to change something when it is outside one's control. I think the Senate experience probably will have highlighted that. The issue in respect of the United Kingdom hearings was equally interesting, if a bit more discursive. What struck me about it was that the Irish tax system and the residency system we use is very much based on the system in the United Kingdom for obvious historical reasons. The point that was giving people in the United Kingdom the greatest difficulty was legislation they had devised themselves to ensure that profits would be assessed where matters were managed and controlled, which was exactly the nexus of much of the debate that was taking place in the United Kingdom. I derive two points from this. First, the underlying reality does not always meet the headlines in this kind of coverage. Second, sometimes the rules we have, when they do not suit our own purposes, are open to criticism.