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

I move amendment No. 41:

In page 39, between lines 7 and 8, to insert the following:

“22. The Minister shall, within 3 months of the passing of this Act, bring a report on the amount of tax revenue foregone as a result of the changes to capital allowances relating to intangible assets made in Budget 2014 and the re-introduction of the 80 per cent cap in such allowances in Budget 2018, the reasons for the Budget 2014 changes and the additional revenue that would be generated by applying the 80 per cent cap for the time prior to 11 October 2017 where the allowance was 100 per cent.”.

This amendment deals with a topic that we have already discussed at some length about the changes made to the capital allowances allowed on intangible assets in 2014 and the enormous tax benefits they conferred on a small number of companies, notably Apple among others. We have made the point. To paraphrase the Minister, he said the Government does not gear its tax policy around any particular company. That is probably true because I think it was more around a group of companies. The Minister did refer to sectors of industry. I think it was a group of companies who benefitted from this. We are all familiar with names such as Apple, Google, Facebook, Amazon and a few others. I believe that whether it was through direct lobbying or just the servile attitude that successive Governments, not just that of which Deputy Donohoe is a part, but previous Fianna Fáil Governments, have shown towards those companies to the effect that they just want to do anything they can to please them and that means tailoring the tax code to suit their purposes.

We have had the discussion so there is no point in labouring it. We clearly disagree on this issue. However, I take issue with the argument the Minister made about what would happen were we to go back and close the window that was opened for them in 2014, which the Minister is only closing now after all the intangible assets have been onshored and where they will derive the tax benefit of paying no tax on the income from those assets for up to 15 years.

I do take issue with the argument the Minister makes that, were we to go back and close the window that was opened for these companies in 2014, and which he is only closing now after all these intangible assets have already been onshored, and where they will derive the enormous benefit of paying no tax on the income from those assets for up to 15 years, many other people might be affected where there might be a legitimate basis for their expectation to benefit from that change.

I do not know how the Minister does not draw a distinction between a company that might actually purchase an intellectual property asset, where it is a genuine cost on the company, and a company that is clearly doing this as an accountancy exercise, where it is not a cost on the company because it is buying the asset from itself and has set up a network of companies purely for the purposes of minimising its tax liability and benefitting from these kinds of allowances. I just do not see how the Minister does not draw the distinction and why the tax code cannot so do. Of course, if there are legitimate costs for a business, it is reasonable that it should get an allowance on those costs against its trading profits to reduce its tax liability. However, this is a case of Apple, Google or Facebook moving around assets between its own subsidiaries in order to manipulate the tax code and reduce its tax liability. Everyone knows that, the Minister know it, and we have known it since long before 2014 and the onshoring of these assets. All of the tax avoidance that has been engaged in by these companies all centred around similar types of manoeuvres around intellectual property and payments of one subsidiary to another, whether from stateless subsidiaries that were incorporated here but not tax-liable here or subsidiaries that are no longer stateless but are located in Jersey, where they do not have to pay tax anyway, so it is the same difference. It is the same type of tax avoidance strategy and it is one company doing it. Therefore, I do not see how they can in any sense be deemed legitimate costs. It is just a way for such companies to reduce their tax liabilities on their absolutely staggering profits, and they are literally writing their own tax bills. They are deciding how much tax they will pay, not the Government, the tax code or the nominal tax rate. None of that actually determines how much tax they pay; they decide how much tax they pay through a manipulative accountancy exercise. I do not see how the Minister deems that to be legitimate and, as I said, why he cannot draw a distinction between companies that clearly are engaged in tax avoidance and companies that might actually have a legitimate claim on an allowance.