Mr. Conor O'Brien:

Historically, Ireland did not have very sophisticated transfer price rules, although there was always some element of transfer pricing principles in our law. Some years ago, we introduced OECD best practice transfer pricing rules into our tax system, which are now being applied and audited by Revenue. Our transfer pricing regime has been tightened up, which is an important aspect of the whole OECD base erosion and profit shifting, BEPS, initiative. Indeed, transfer pricing is a major part of the whole issue of taxation of global multinational entities.

There is a great deal of talk about the chain and Ireland being a conduit. One will find, for instance, that where a great deal of income ends up in the Caribbean, say, that is not the full picture. Under transfer pricing principles, the conduit will not end there. In fact, a great deal of that income will then be transfer-priced out by the United States tax authorities into their jurisdiction. They will say that it is the people in white coats in laboratories in California who are doing the research and will force those Caribbean companies to pay fees to the United States. One has to take that into account in order to see the complete chain. Transfer pricing certainly is and will continue to be part of the global response. The rules here in Ireland have been tightened up in this regard.