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

Absolutely. We will provide it to members. My apologies for that.

As I said, it refers to two protocols to the existing DTAs with Isle of Man and Guernsey. Ireland signed the original agreement with the Isle of Man in 2008 and with Guernsey in 2009. The protocols for the Isle of Man and Guernsey were signed on 18 November 2021 and 8 December 2021, respectively.

As the members will recall, arising from the OECD base erosion and profit shifting process, known as BEPS, Ireland ratified the multilateral convention to implement tax treaty related measures to prevent BEPS in 2018. The convention was discussed at this committee and in the Dáil and was included in the Finance Act 2018. The multilateral convention came into force for Ireland in 2019 and it has been the means for updating the majority of Ireland’s existing double taxation agreements to make them BEPS-compliant. Our existing agreements with Isle of Man and Guernsey were not updated by the multilateral convention but will instead be updated bilaterally to reflect the BEPS changes. That is what the two protocols before the committee today now seek to do.

Ireland has been to the forefront in both signing and ratifying the multilateral convention and these bilateral protocols are another important step in the implementation of the OECD BEPS actions. As for those partner jurisdictions that have not yet signed the BEPS multilateral convention, Ireland has written to them to discuss options for implementing the BEPS recommendations. We are committed to ensuring that all our double taxation agreements meet the required prescribed standards agreed in the BEPS process. A common feature of the protocols with both the Isle of Man and Guernsey is the incorporation of strong anti-avoidance measures and tools for tackling tax treaty abuse. Both bilaterally-agreed protocols contain the prescribed standards to which Ireland committed during the BEPS project.

With regard to the protocol to the Isle of Man agreement, Ireland signed its agreement with Isle of Man in April 2008. In March 2018, the Isle of Man’s Treasury asked the Revenue Commissioners if the 2008 agreement between Ireland and Isle of Man could be updated by protocol instead of using the multilateral convention to implement tax treaty related measures to prevent BEPS.

Ireland agreed to the request. Negotiations happened in 2018 and concluded in January 2019. That protocol was signed in November of last year and is now before the committee. The Guernsey treaty protocol was signed in March 2009. In June 2017, Guernsey also asked the Office of the Revenue Commissioners if the agreement could be updated by protocol. Ireland agreed to the request and negotiations took place, beginning in 2017 and concluding in October 2018. The protocol was signed in December of last year and is before the committee today.

Our network of double taxation agreements is an important aspect of our competitiveness in attracting investment and facilitating Irish business in operating internationally. In addition, double taxation agreements are a cornerstone of our trade policy and provide greater certainty and fairness for taxpayers regarding their tax obligations in foreign jurisdictions and they are key to the prevention of double taxation.

The benefits of double taxation agreements are well known but concerns have been expressed that treaties may inadvertently facilitate aggressive tax planning. These concerns were central to the BEPS project and to the multilateral convention on BEPS. Updating our existing double taxation agreements, whether via the multilateral convention or bilaterally, helps to ensure they cannot be used for aggressive tax planning arrangements. Ireland has been a strong supporter of the BEPS process since its inception. We continue to engage positively at both EU and OECD level in dealing with the tax challenges that arise from the digitalisation and globalisation of the economy including through signing up to the historic two-pillared agreement at the OECD last October. Proactively updating our treaty network to incorporate anti-BEPS measures is an example of that support.

It is timely that I am before the committee today because, following the approval of the Government, I published our tax treaty policy statement earlier this week. The rationale for publishing that statement is to take stock of our existing network and formalise our broad treaty policy. We have come from a period of expansion of the network to the point where we have treaties with the vast majority of our international trading partners. In order to inform the treaty policy statement, I launched a public consultation in April of last year that ran until May 2021. I received submissions from a broad range of stakeholders including business groups, practitioners, NGOs and members of the public. These are all available on the Department of Finance website. My officials held a series of stakeholder engagements to discuss the content of the submissions in detail and the insights we gained from those engagements were important in the drafting of the tax treaty policy statement.

The main thrust of the statement is that we aim to formalise the existing policy of maintaining and enhancing the network of double taxation agreements that facilitate international movement, trade and investment, including through the creation of a priority list of potential partners. A separate dimension of the policy relates to a specific policy for least developed countries, the definition of which is taken from the UN and will evolve as the UN updates its list periodically. One of the main features of this element of the policy statement is that Ireland will not approach least developed countries to seek a tax treaty and, where approached by least developed countries, we will be mindful of their particular and distinctive needs.

If Dáil Éireann approves the making of these orders by the Government, I will include the orders in the Taxes Consolidation Act 1997 by way of an amendment in the upcoming finance Bill. This will enable Ireland to complete the necessary notifications to finalise the ratifications of both protocols. I commend the orders to the committee. I am happy to answer any questions the Chairman or members may have.