Mr. Pascal Saint-Amans:

The reason the OECD has been asked by many countries to carry on this work is precisely because it requires a multilateral approach. This should not prevent countries from taking their own decisions and implementing their own policy. If one wants to address this issue, as shown in the report we published in February, one needs to address issues in the area of international taxation and tax treaties. We are in charge of the model tax convention and bilateral tax treaties, which, by definition, involve more than one country. Especially in today's environment, where a chain of trade or business involves not only two countries but a series of countries and therefore a series of bilateral tax treaties, usually there is a need for a novel approach which would not be limited to one country. Moreover, the issue of transfer pricing, which is at the core of base erosion and profit shifting, is also related to the implementation of the article 9 of the model tax convention, which deals with transfer pricing which enshrines what we call the arm's length principle, which is a method to determine how a group of companies should price internal transactions, transactions internal to the group. The interpretation of the arm's length principle must be adopted by all the countries participating and not only by one. We have fought for years at the OECD to have international consensus on the way to interpret the arm's length principle or to play with it. If we have countries taking their own approaches, which would not be consensual, this would result in the increasing risk of double taxation, which is something we must avoid.

In a nutshell, this is a multilateral issue, which requires a multilateral response. A single country cannot address it and that is why we think a multilateral approach is the right one. That is why the Irish Government has been clear and active in supporting this project. The delegates of the Irish Government have attended all the meetings, have contributed and have been very active. Ireland also had the Presidency of the Council of the European Union and over the past six months it ensured that we would work well with the European Union while developing this action plan, but again that does not prevent countries from also taking unilateral measures if they want. We are not a harmonising organisation and we do not want to impede on the tax sovereignty on other countries.