Mr. Liam Lynch:

One BEPS proposal is to limit access to treaties to domestically owned enterprises of the two signatory countries. If that were to happen, it would limit the access of businesses not completely owned within Ireland to international capital and markets, and that would be a dangerous move.

Similarly, there are some best proposals dealing with company residency. In order to deal with some of those issues, one of the proposals is that it be dealt with by mutual agreement. I have dealt with mutual agreement and in my experience mutual agreement with states is a very lengthy process. Outcomes tend to be subject to the vagaries of what happens at the time and are uncertain. That does not help from a business expansion perspective.

We all agree that transparency is important in the tax process. The country by country reporting module is helpful from a tax authority point of view. It is important when we get to exchange of information on a country by country report to remember how sophisticated data protection rules on that are in Ireland. If we are going to share data and information with all countries in the world, it is important that the same standards apply wherever we are sharing that data. Also the extent of the mandatory reporting needs to be within the ability of businesses and Revenue authorities to deal with it.

The standardisation of transfer pricing documentation is welcome. It is important that it be standardised rather than set at a minimum in order that companies can deal on an even basis across the world. There is a huge opportunity here to cut down on administration but if there is simply a minimum standard, what happens is that countries add to it bit by bit and it loses its effectiveness both for business and the taxing authorities because it leads to a situation where one has unequal information.

Mr. Philip Kermode mentioned work on hybrid mismatches. That is always an awkward issue. It is a mismatch where a company or a transaction is treated differently in one country versus another. That is the case because of the way the system grew up piecemeal. Work on that issue is long over due. One of the proposals about which we need to be careful is the imposition on businesses to look in non-controlled circumstances as to what is the treatment on the other side, rather than in control situations. Overall, it is a worthy project to modernise the global tax framework and I hope it succeeds.

As Ireland is home to a large number of substantive international businesses which at the end of the day employ, directly and indirectly, hundreds of thousands of people, it is clear that the Irish tax system places a premium on substance in Ireland and as such Ireland has much gain from the modernisation of the system. Clearly, we need to look on the other side to what works best. What happens here has to be revolutionary and represent a consensus between all countries. We must take care to ensure the process is not hijacked by national or sectional interests and that the final proposals are practical and easy to implement.