Mr. Brian Keegan:

As Mr. Clarken observed, the transfer pricing legislation has only been in place formally since 2011. The Irish transfer pricing legislation is in full conformity with the OECD standards. It is hot-wired against them, so it compares well pari passuwith everything else. However, Deputy McGrath is right. The mismatch that arises is fundamentally the result of disputes about the so-called arm's length principle and the real market value of items being charged across borders. In so far as the focus of any revenue authority is concerned, such authorities will only examine the impact on their own tax takes. They will not necessarily alert other revenue authorities. At least, that was not the case until recent initiatives on exchanging information across borders became more prevalent.

There has been a strengthening of provisions against potential profit shifting since 2011, particularly in Ireland. Participation in BEPS is contributing towards Ireland's capacity to manage that. One of the great pities of the Apple case is that the European Commission's investigation seems to have damaged the BEPS process. There is increasing push-back from the US in particular against participation in, for example, country-by-country reporting and harmonising tax treaty arrangements because of a sense that the BEPS project is unfairly targeting some of its multinationals. Many complex issues are involved, but the movement is undoubtedly in the right direction. Ironically, the Apple decision does not help that.