Dr. Martina Lawless:

I will take up the Deputy's questions on the research which received some coverage in this morning's paper on Ireland's status as a tax haven. There are number of international definitions of "tax haven", including an OECD definition. In those definitions the focus is on whether there is a zero or nominal rate of taxation on multinationals; they are treated differently from domestic firms; whether there is tax secrecy laws or restrictions on sharing of tax information with other countries and whether there is no substantiative activity associated with the multinational activity within the country. It is pretty widely agreed across all of the international organisations that buy this set of criteria that Ireland is not a tax haven. The research that was published this morning took a list of tax havens that had been put together by some academics in the early 1990s, drawing on data from the 1980s. The issue is that it took Ireland's export tax relief, which was 0% in the 1980s, as special treatment of multinationals. It was not particularly evidence of special treatment of multinationals in that it applied also to sales by domestically owned exporters. In any event, this tax relief has long since been phased out over more than 20 years. To the extent that there was initially a rationale in 1993 for Ireland's position on this list of tax havens, I do not think anybody would agree now that Ireland is a tax haven. Ireland is a big base for foreign direct investment, FDI, but that is not in and of itself evidence that the country is a tax haven.

The Deputy is correct that in terms of the perception that Ireland may be unfairly competing for activities where activities are being booked, particularly digital activities where it is hard to distinguish the source of the sales versus where the value is being created, is a concern for Ireland's international image. In terms of discussions at European level on how corporate tax could be differently allocated across countries - the common consolidated corporate tax base proposals - we have raised on a regular basis in our fiscal assessment reports that changes to the corporate tax environment across Europe could be a significant risk for Ireland. If the proposals suggest that the tax revenues be allocated on the basis of where the sales take place rather than where the company is headquartered or the employment is, this would work against a small economy like Ireland that is exporting a lot of these services. We pointed to this as a significant risk going forward for Ireland's economic structure.