Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I am merely pointing out that the statistics the Deputy quotes are not statistics that I accept. I am not accepting them on the basis of the report that the Department published and co-authored with Mr. Seamus Coffey. Let me respond directly to the amendment from Deputies Tóibín and Doherty.

At 12.5%, as we have already discussed at length, Ireland has one of the most competitive headline corporate tax rates in the OECD. Our competitive rate of corporation tax has been an important part of industrial policy in this country since the 1950s, and has attracted real and substantive operations to Ireland since then. I refer the Deputy to an ESRI report published on budget day last year which showed what would have happened in terms of job losses and investments not made had we altered the rate of corporation tax to a higher level.

All companies in Ireland pay the standard 12.5% rate on their profits generated in Ireland. A standard 25% rate applies in respect of investment, rental and other non-trading profits and profits from certain petroleum, mining or land-dealing activities. A rate of 33% is applied to the chargeable gains of companies.

Some other countries may have a high headline rate of corporation tax which is then supplemented by a high number of tax reliefs. The approach in Ireland, however, is more transparent. We have a relatively low headline rate of corporation tax, which is applied to a broad base. We therefore have only a small number of incentives in Ireland, but we ensure that these are targeted. They are focused, first, on the creation of additional employment, as is consistent with current Government policy, and second, on areas of innovation, as we have already discussed, with a view to generating high-value-added economic activity.

As the Deputy will be aware, in 2014 the Department of Finance produced a technical paper, Effective Rates of Corporation Tax in Ireland, for this committee. The paper was produced - I acknowledge the work of this committee - as a result of discussions held during the Committee Stage of previous year's Finance Bill. It contained a comprehensive analysis of effective rates of corporation tax paid. It was submitted to the committee and published in April 2014. The paper was prepared in order to provide clarity about the seemingly conflicting figures that are frequently quoted, and is an excellent resource for those seeking to understand and obtain more information about what is clearly a complex technical issue.

There is no internationally agreed standard for calculating effective rates of tax. Therefore, the paper examined three different methodologies used in the calculation of effective rates of corporation tax generally. The paper also analysed eight different figures that are quoted in respect of Ireland in greater detail. Each of these different approaches is relevant depending on the nature of the question being addressed. However, in attempting to assess the effective corporate tax rate applying to the total profits earned by companies in Ireland, the paper concluded that the approach based on national aggregate statistics from the Revenue Commissioners and the Central Statistics Office is the most suitable.

The paper found that the effective rates of corporation tax, as measured according to statistics from these two sources, are reasonably close to the headline rate of 12.5%, and that the difference is mainly accounted for by double taxation relief and a small number of other reliefs, including the research and development tax credit. The report was based upon the analysis of effective rates across a ten-year period and, therefore, does not need to be re-examined on an annual basis. On the basis of this extensive analysis, we are comfortable that companies in Ireland are paying the appropriate rate of corporate tax on profits generated by those companies in Ireland.

In relation to the publication of details on the effective rates of corporation tax paid by individual companies in the State, both the Department and the Revenue Commissioners would encounter, as we have already outlined in previous discussions, a number of issues regarding the confidentiality of individual taxpayers. There are strict taxpayer confidentiality rules which would prohibit the Revenue Commissioners from providing taxpayer-specific information. It would not, therefore, be feasible to publish any individual details while maintaining a taxpayer's right to confidentiality.

In the budget, the Minister, Deputy Noonan, announced that from 2016 onwards that certain multinational companies would be required to submit to the Revenue Commissioners an annual report of their groups' activities on a country-by-country basis - we have dealt with that already. This will ensure that the Revenue Commissioners have improved information about the global activities of multinational companies and will help them with assessing high-level transfer pricing risks.

Between this new country-by-country reporting and the fact that a detailed report was provided to this committee following on from previous engagement with this committee, the Minister does not see the need to publish another report on an annual basis, considering the report looked at a ten-year period. Given that a detailed report has previously been prepared by my Department and the need to allocate scarce resources most effectively, I cannot accept the Deputy's amendment.