Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

When this committees analyses the common consolidated corporate tax base, CCCTB, proposals, it should bear in mind a significant concern raised by the Revenue Commissioners and the Department of Finance, that Ireland has a broad tax base which would be narrowed considerably were the proposals to be introduced. That was one of the main points raised. It is clear that there is no consensus on how minimum effective rates should be calculated. The Coffey report of 2014 was a very good one. Perhaps it should be updated, but it did not substantiate the frequently made claims that the effective rates were in the order of between 2% and 5%. I am concerned about some of the long-established reliefs which were limited because we had a very broad tax base, notwithstanding our discussion on how losses affected the banks which was most exceptional, rather we should discuss the issue of losses generally, research and development tax credits and the treatment of capital allowances. If after applying all of these, one was to arrive at a certain taxable profit and apply the 12.5% rate and it came into conflict with the minimum effective rate one might set in a hypothetical scenario, would the achievement of the minimum effective rate supersede retaining the key pillars of the corporation tax code for research and development, capital allowances and losses? There is a potential conflict which must be acknowledged. These are legitimate deductions which are part of the corporation tax code and which could potentially come into conflict with achieving a certain minimum effective rate, depending on how one would measure it. Anyone who reads the report which runs to over 40 pages will see clearly that there is no consensus on how minimum effective rates could be achieved. It is the case that Ireland does not have as many reliefs and allowable tax deductions as many other jurisdictions in Europe. We have seen the analysis in which countries such as France which have higher headline rates end up with much lower effective corporation tax rates. That should be acknowledged.