Seán Fleming (Laois, Fianna Fail) | Oireachtas source

Wow. We have learned something new today about this and we will take that up with Revenue. I know it is a relatively new tax allowance, but the members and witnesses can see why I wanted to raise it. This is how a company can easily get an effective rate combining that 6.25% and that 37.5% write-off on the 6.25%.

I move to page 42. I thank Dr. Keegan. He has given us a summary note on the Coffey review, which was carried out by Seamus Coffey. For the record, I understand Mr. Coffey made a presentation some time ago to the finance committee so I did not invite him here today to repeat what he has already said in the Houses of the Oireachtas. What he said is reported on the record. He makes a number of recommendations in the review, and we as a committee will take note of pages 42, 43 and 44 of Dr. Keegan's briefing relating to this. We will not restate the recommendations. They are already on the public record. Mr. Coffey essentially highlights the risk to the taxpayer of over-reliance on this and talks about intellectual property, base erosion and profit shifting and transfer pricing. Dr. Keegan's summary note on this is helpful to us.

I turn to page 45. I refer to the issue of tax residency in the second paragraph. I think I asked Dr. Keegan about this on the previous occasion while the committee was in private session. An individual's tax residence can be primarily determined by their physical presence. Generally an individual is considered to be resident for tax purposes in Ireland if they spend 183 days or more in Ireland in any one year. That is six months. I cite the example of someone who spends four months in one country, four months in another country and four months somewhere else. He or she is not resident for tax purposes anywhere. I know Dr. Keegan will say he or she pays tax on the income generated in each of those areas, but a clever person could have the majority of his or her income somewhere else and not be tax resident anywhere. That can happen.