Dr. Jim Stewart:

There are problems with the OECD reforms. Some of the reforms are very good and I thoroughly support them. Some of them are not so good. One of the problems is that the OECD reforms require consensus. They cannot be implemented unless all countries agree. This is why the OECD's most recent reforms relating to a minimum tax rate have run into difficulties. However, there is a possibility that the European Commission, through its directive implementing the OECD proposals, could implement what the OECD has not done. This would require unanimity at the Council. The Deputy knows the names of the countries that would object if this directive was voted on at the Council. It would involve various changes.

Regarding the OECD initiative, section 110 firms are certainly at variance with this. The hybrid initiative, the directive the EU has introduced, is basically a transposition of what the OECD recommended. The hybrid directive is attempting to ensure there is no double non-taxation, and this is effectively what section 110 allows. I notice there are concessions given to aircraft leasing, but the hybrid directive, if implemented, will certainly reduce the advantages of using section 110 finance.