Mr. Rónán Hession:

Following on from the point on the double taxation treaty, Ireland and a number of other jurisdictions, including the US, operate tax systems on a worldwide basis. In other words, we tax overseas profits but give credit for the tax paid overseas. In effect, taxes are paid on profits in Ireland. The same result could be achieved using a territorial system, whereby we would tax profits in Ireland but would not seek to tax overseas profits as they would be taxed in another jurisdiction. The latter type of system requires the introduction of a particular type of anti-avoidance rule, which is known as the controlled foreign company, CFC, rule. This ensures that companies do not artificially stuff their profits in the jurisdiction that has a lower tax rate than their home country. Under a European directive, this rule has to come into effect in Ireland on 1 January 2019. Seamus Coffey's view is that given that one of the reasons we have not made this move up to now is because we do not have the CFC rule but we are now required to introduce it, it is timely-----