Simon Harris (Wicklow, Fine Gael) | Oireachtas source

There is quite a lot in what the Deputy said. I am somewhat disappointed I have not heard a response from Deputy Boyd Barrett with his thoughts on the document, whereby arising from debates of this committee, the Department of Finance conducted a substantial amount of analysis. All of the figures, including those mentioned by the Deputy, were included and it has come up with what it believes is the best and fairest way of assessing the tax. It was not an insider job. Outside expertise was involved in the form of an eminent economist.

There is a great deal of food for thought in it. It is important that it exists because it dispels some of the myths that have existed with regard to corporation tax. The Deputy is quite correct when he says this is extremely complex. As I alluded to in my initial remarks on this proposal, there is not necessarily one universal way of doing it. We have tried to get to the best way of arriving at a transparent point. I put those figures on the record here today.

A great deal of corporation tax is paid in this country. The Deputy's constituency is in Dún Laoghaire-Rathdown, where corporation tax of €278.3 million was paid between 2008 and 2012. We will have to do better in my own constituency of Wicklow, where just €63 million was paid in corporation tax over the same period. I have taken those figures from a 40-page document that was published on budget day, entitled Corporation Tax – A Note on the Context and Concentration of Payments. Indeed, a total of seven reports on corporation tax were published on budget day as part of the accompanying documentation. We have mentioned the double Irish system and the knowledge box. We have not mentioned the OECD base erosion and profit-shifting process, but we know about it. A great deal of effort is being put into looking at this entire area and at Ireland's competitiveness. Given that seven reports were published on budget day, along with the 40-page document to which I have referred, it is clear that a significant body of work has been done.

Deputy Boyd Barrett has raised issues about the amounts of money that have been raised and paid. If he does not mind me saying so, the 40-page report I have mentioned would suggest that he has confused the issues of gross profits and taxable income. The chapter of that report starting on page 22 explains the difference between the two. The suggestion that the right amount of corporation tax is not being applied to these companies in Ireland is dispelled in this neutral and objective report on the situation. I would welcome and appreciate the Deputy's comments on box 3.1 in the report, which sets out the main differences between gross trading profits and taxable income. I am the first to concede that it all gets terribly technical. We have done a very extensive analysis and arrived at figures. This body of work had not been done previously. The concluding section of the report, on page 40, states "the effective Corporation Tax rates on Net Operating Surplus and Taxable Income have averaged 10.9 per cent and 10.7 per cent respectively " since 2003. I do not necessarily expect that the Deputy and I are going to agree on this. I am sure this debate will continue.

The knowledge box is not an attempt to have some sort of tax-avoidance scheme. It is quite the opposite. It is an attempt to catch up with many of our competitors that already have patent boxes in place. Deputy Pearse Doherty correctly alluded earlier to the need to get this right. Obviously, it needs EU approval. The Minister could have chosen to try to rush some sort of patent or knowledge box through the Finance Bill pending EU approval, although I think it would have been unwise to do so. He has chosen not to do that. There will be a consultation period, which will be launched by the end of 2014. We will have further details fleshed out at that stage in terms of where the Government wants to go. Ultimately, we want to introduce a competitive income-based regime for intangible assets in Ireland. It has been recognised that many of our economic assets and much of our economic activity is now in intangible areas like intellectual property. Other countries are already doing this. It is not an attempt to introduce a new double Irish system. I cannot be clear enough on that. We hope to legislate for this in the Finance Bill 2015. I am sure people will have plenty of opportunities to engage through the consultation process.

It is quite right that the debate about corporation tax is continuing. It is a very important issue. I think it is the fourth largest tax take that this country has. I am sure the debate will continue. I genuinely believe the work being undertaken by the Department of Finance at the initiation of the Minister for Finance provides a great deal of food for thought and data. Perhaps it is something we can explore further. It is on that basis, and no other, that the Minister for Finance does not believe it is necessary to accept Deputy Pearse Doherty's amendment on this occasion.