Oireachtas Joint and Select Committees

Wednesday, 4 December 2019

Committee on Budgetary Oversight

Fiscal Assessment Report: Irish Fiscal Advisory Council

Mr. Seamus Coffey:

It was a rhetorical device. I am not quite sure in which circumstances Ireland could avoid being a tax haven in that instance if it is a tax haven when it collects what would be considered to be low and also when it collects relatively high amounts.

On corporation tax, I note that the corporation tax receipts in both France and Germany have doubled since 2009. It took a longer period for their doubling to take place. Our doubling has taken place since 2015. However, in those countries the receipts have increased. The BEPS process has not necessarily been about trying to get corporations to pay more tax. It has in large part been about changing that. One of the risks in the Irish case is that more tax could be taken away from the production activities that were traditionally allocated taxing rights to the more consumer or market end of the spectrum. It is not necessarily about increasing the overall amount of tax and it could be about the destination of it.

Recently the body equivalent to ours in France, the French Council of Economic Analysis, undertook a study of the impact of the current BEPS proposals on French corporation tax revenue. When it looked at the Pillar 1 proposal to allocate more taxing rights to the market countries, it found it would have almost no impact on French corporation tax receipts in net terms. While it found significantly more revenue would be collected from digital companies, online companies and Internet companies, on the other hand it would lose a significant amount of tax revenue from the sale of handbags, cognac, cars-----

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