Mr. Brian Keegan:

The first two questions are particularly interesting. I will answer the second question first because it is germane to the answer to the first question. The question of whether companies should pay tax in the location of their assets is a fundamental ongoing debate. What it really boils down to is the question of whether a company pays tax where it does the work or where the market is. There have been several attempts over the years to achieve one or the other. The EU had a project running for several years that was called the common consolidated corporate tax base. One of the ideas behind it was that companies would pay a proportion of their tax where their market was located as distinct from where the product was manufactured. It is an issue that is very much to the fore in the BEPS discussions at the moment where there is a suggestion that there should be more tax attributable to the location of the market, particularly in the context of digital goods and services. The difficulty for a country like Ireland which has a big manufacturing base and a relatively small market is that this will erode our tax take. How would it be achieved? It would primarily be achieved through the modification of provisions in the tax treaties, primarily the concept of permanent establishment and where companies are located.

My last observation on this, which may be germane to the third point, is that there seems to be a strong move internationally towards the prevalence of consumption taxes, what we called value added tax, which in a sense addresses that point because it renders a level of taxation in the country where the market typically is.