Mr. Rónán Hession:

To some extent, the Deputy is drawing me into a policy question so I will be delicate about how I handle it. My point about it being a profit tax is that it reflects the business cycle. If we tax the profits, we do not tax the losses. The losses are offset. From a stability point of view, it is something companies would expect in the context of their long-term planning. If they make losses in a given year, they would need certainty that these would be offset against future profits. Otherwise, we are just taking a point-in-time view of the tax as opposed to recognising that there will be a business cycle. From the point of view of certainty, that is what companies in Ireland or internationally expect to see.

When there are very large losses in the system, particularly recovering from a financial crisis, it is completely legitimate to have a policy debate about how that should be handled. It is a policy choice whether the right thing for the country is to let those losses be claimed over a longer period and collect some tax in the meantime or to give companies the ability to use those, as Mr. Howard said, within a group or whatever. That is a legitimate policy debate.

From my point of view, the use of losses in this way is typical in our comparative jurisdictions. It reflects the business cycle. In terms of the international reforms, whether we see them at OECD or EU level, there is no strong preference coming from countries at that table to handle losses differently or to try to push that as an issue. That is not to say it cannot be discussed in Ireland or that it may not be the right issue for Ireland. If I were asked about it by the new Minister, my sense would be that there is an orthodoxy to the way we approach it currently which provides certainty to business. That is a very valuable message in terms of ensuring they know where they stand across the business cycle. I am not sure if my Revenue colleagues have anything to add.