Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

I am utterly opposed to the knowledge development box. I do not accept the Minister of State's assurances that this is not just replacing the double Irish tax scam with a new tax scam. I think that is exactly what the Government is doing. Having been exposed very badly with the double Irish, the Government in collusion with the multinationals has engineered a new tax scam, which is the knowledge box. This is borne out by the fact that on a number of occasions the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, has had meetings with the US multinationals, and he has openly acknowledged that he has discussed this in detail with them. From his most recent meeting in October he reported very positive feedback from the multinationals. I am quite sure there is very positive feedback from them because, as we know from an abundance of evidence, they are keen to pay as little tax as they possibly can on their absolutely extraordinary profits. In recent years we have allowed them to evade an extraordinary amount of tax under the double Irish mechanism.

I do not believe the Government or the Revenue Commissioners did not know of the abuse that was going on. That applies to the previous Government and the current one. I made a point on Second Stage and I will expand on it here, as I have a little more time now. The Department of Finance's technical paper on the effective corporate tax rate contains a table produced by Revenue, table 3.25, on corporation tax distribution statistics. There are the gross trading profits figures and then the allowances are taken out. There is net trading income, other income and then total income. It is amazing that in 2007, total income was €63 billion after the allowances were taken out. The deductions in that year were €6 billion, so the taxable income was €56 billion. To be clear, those deductions include trade charges, which was the main mechanism through which the big multinationals wrote down their tax liability. One subsidiary of a company would charge another subsidiary of the same company for the cost of using its intellectual property or patents. They effectively wrote off most of their profits by charging it to intellectual property. In 2007, €6 billion was written off, mostly under the heading of trade charges by the big multinationals. Two years later that figure jumped from €6 billion to €19 billion, which is a factor of three. If I were in Revenue or in the Government of the day, I would be asking, "What the hell is going on here? Has the cost of intellectual property jumped by that much?". The total trading profits were not that different; in fact they were less.