Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 114:

In page 120, between lines 25 and 26, to insert the following:

“Report on introduction of measures to combat aggressive tax avoidance

74. The Minister shall, within 6 months of the passing of this Act, prepare and lay before Dáil Éireann a report on the introduction of measures to combat aggressive tax avoidance, such as a tax surcharge of 30 per cent applicable to Irish company revenue

when it is established that Irish companies are using intra-group arrangements to significantly reduce their liabilities through the transfer of money and assets to other countries.”.

This amendment uses the same mechanism as the last to look for a report on the introduction of measures to combat aggressive tax avoidance, such as a tax surcharge of 30% applicable to Irish company revenue when it is established that Irish companies are using intra-group arrangements to significantly reduce their liabilities through the transfer of money and assets to other countries. This is a general anti-avoidance provision. I have suggested a surcharge of 30% but it could be something different. That would be applicable to Irish company revenue when we can establish that these companies are using intra-group arrangements to significantly reduce their liabilities through money that is being loaned out or channelled back to Luxembourg or other such countries as part of intra-group arrangements. We know that this is taking place and we need to examine it and see what actions, if any, are required, or if this type of surcharge would be beneficial.

Take the example of the nine companies in the Goodman Group which made a profit of €170 million last year and had assets worth €3.45 billion. Accounts filed in Luxembourg indicate these figures. The bulk of the profits were booked in Luxembourg and were largely untaxed. Nine companies in the Goodman Group made a profit of €170 million on the back of assets worth €3.45 billion. The fact that the bulk of these profits have gone untaxed is unacceptable and should not continue.

The Goodman Group is a very successful, family-owned business in Ireland. It does not publish accounts that show its overall profit. The group has commercial interests in Dublin, in the Blackrock, Hermitage and Galway clinics. Four Goodman companies are based in Luxembourg: Silverbirch Investments, KH Holdings, Aburg and Parlesse Investments. These are used for intra-group financial transactions, getting loans from, giving loans to and making investments in other group companies. The four companies, which have no employees whatsoever, produced profits of €123 million in their most recent financial year, paid almost no tax and had approximately €2.5 billion in assets at the end of March 2018.

One of the advantages that can flow from using Luxembourg for intra-group financing arrangements is that the taxable profits of companies in other jurisdictions can be reduced by way of payments made to the companies in Luxembourg which, in turn, pay little or no tax. We know the accounts for the four Luxembourg companies also give details of two Irish subsidiaries, a Jersey company and two companies located in The Netherlands. The structure of the group is very complex. All these details have been published in the media.

This merits examination, whether this structure or, indeed, any other structure is involved in completely legal aggressive tax planning. The State and this finance committee should consider whether to introduce measures to counter this aggressive tax planning, which is legal and allowable under our current finance code, in next year's Finance Bill. One way to do that would be through applying a surcharge of 30% to Irish company revenue when it is established that Irish companies are using intra-group arrangements to significantly reduce their liabilities through the transfer of money or assets to other countries.