Mr. Rónán Hession:

There are provisions for a balancing charge if the entity was to move offshore within five years. We discussed earlier the base erosion and profit shifting project. What has been happening over many years is that intellectual property has been held offshore in jurisdictions with low corporation tax and, in some cases, no corporation tax. One then has royalty flows going out to the jurisdictions where the intellectual property is held. The OECD has introduced new transfer pricing rules whereby, if there is no substance in those jurisdictions, that sort of tax arrangement does not really work. What multinationals have to do now is look where they have substantive activities, employment and decision makers and co-locate the intellectual property with that substance. For some of those that have substantive operations in Ireland, it makes sense to move their intellectual property here. Once it comes onshore, like any other type of asset, it will be subject to depreciation and that is based on what is in the accounts. They follow within the accounts. What we have done in the Finance Bill, which has completed Second Stage in the Seanad, is that there is a cap on the extent to which companies can use these allowances. This measure will raise about €150 million a year.