Ms Cora O'Brien:

Even leaving aside the economic numbers, with which my colleague Mr. Seamus Coffey might be more involved, the main point, based simply on taking a look at the exercise that would have to be done if we were to work out today the impact on the Irish Exchequer, is that there are so many unknowns. Just taking the base, there will now be more generous expense deductions than before. There is a new deduction for increases in equity and an exemption for foreign dividend income. We have a credit system at the moment and there is relief for cross-border losses. We have currently got a best-in-class research and development regime which could also be affected. There is also the complication that the system is mandatory now. Having said that, other smaller companies might want to opt in if they seek benefits. Therefore, we would need to bring that aspect into the analysis. Those are the issues associated with trying to work out the impact because of the base changes.

Regarding the impact if we were to consolidate and reallocate based on this formula, I believe it would be so difficult. One would need to know each of the affected businesses' pan-European operations, where they have assets and where they make sales and have customers. If one does not have those data, one cannot estimate what the new position will be under the triple CCCTB. That is a very complicated task. We know the non-EU sales will now be reallocated to other EU countries. If the arrangement is introduced, one will have to consider the cost of administering the two systems because some of the smaller companies might prefer to stay in the existing system. All of this really just takes account of the static changes. There are also the dynamic changes. Would businesses move functions and operations in a CCCTB environment if they believed they would be paying a lot more tax? The potential cost to the Exchequer is very significant and very hard to measure.