Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Article 12 of the multilateral convention introduces a new test for when an agent can constitute a permanent establishment or a taxable presence in another jurisdiction. This article is not a minimum standard under the multilateral convention so signatories are free to opt out of this article.

I am not adopting this provision but I am committed to keeping it under review. It is open to Ireland to lift our reservation at a later date. The reason I am not adopting Article 12 at this time is that there is significant uncertainty as to how the test will be applied in practice. Similar to Ireland, the majority of signatories to the multilateral convention, including Ireland's major trading partners such as the UK, Germany, Canada, Italy, Sweden and many others, are choosing not to adopt this article due to continuing uncertainty. Ireland's position is in line with the majority of EU member states, the majority of OECD member states and the majority of our tax treaty partners. I will keep it under review and get a clearer sense of how it is being applied. It is open to us to include this article in treaties bilaterally, on a case-by-case basis, should a treaty partner seek to do so and should there be a sufficiently strong case for both partners. On the basis that Ireland will deposit our notification and reservations with the OECD on 19 January, a report delivered in the timeframe suggested in the amendment would not illustrate any sufficient developments in this space.

However, I will have officials include further analysis on this as the position on article 12 develops as part of the tax strategy group papers for next year. On that basis I do not accept the amendment.