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

The impact of double taxation agreements on developing countries is something we are considering at present. As I said earlier, we are engaged in a process of public consultation on this issue. We have engaged with stakeholders and NGOs, some of which have advanced strong views on this. We are considering different submissions and I hope we will be in a position to be able to draw conclusions on the consultation and publish them by the start of next year. In the consultation, we specifically sought the views of the World Bank. We actively sought its views on this in order that we could understand it a bit more and feed it in to our thinking. I have a differing view on our standing on this issue but I am not blind to the debate which has developed and I know it is important that we have a policy statement in place that allows us to give a clear narrative and perspective on our position.

Article 12 of the multilateral instrument introduced a new test for when an agent can constitute a permanent establishment. As it is not a minimum standard under the multilateral instrument, signatories are free to opt out of the recommendation. We did not adopt this provision but we have committed to keeping the decision under review. It is open to us to lift our reservation in respect of Article 12 at a later date. We did not adopt Article 12 as there is significant uncertainty as to how the test would be applied in practice and this is still the case. Similar to Ireland, many signatories to the multilateral instrument are choosing not to adopt Article 12 due to this uncertainty. Some of our major trading partners such as the UK did not adopt Article 12 either as adopted by the final position deposited within the OECD. While we are not in it at present, once there is sufficient clarity as to how the test might be applied, we are open to including it in our tax treaties.

This could potentially be done bilaterally case by case.

The summer economic statement was mentioned by earlier speakers. We are in the final phase of working on it at the moment. I need to brief Government first and, when that is done, I hope to be in a position to be able to present it and update the Oireachtas committee on it.