Mr. Seamus Coffey:

The Chairman asked why I keep focusing on 2015. The prime reason for focusing on it is that we had a 6% rise in the corporation tax yield in just one year. The corporation tax yield can be volatile, but that increase was unprecedented here and probably internationally without any policy change. The Chairman spoke about the stability of our regime. We did not change our regime wholly in 2015 leading to that huge surge in receipts.

There were a number of factors. The improvement in the domestic economy led to more corporation tax being paid by Irish companies. Companies that had losses in 2014 did not have losses in 2015. There was an increase in corporation tax paid on capital transactions. Most companies pay their capital gains tax through corporation tax. It appears as a corporation tax payment. Outside of, I think, profits on development land, all profits on capital transactions appear through corporation tax. However, these only tended to add a couple of hundred of million euro to what was a €2.3 billion increase.

The OECD BEPS project may have had a role particularly for the multinational companies. With the introduction of country-by-country reporting and beginning to collect data from 2015-16 some companies may have adjusted the previous practices which would have been in line with what was required legislatively. As we have seen over recent years, companies that get themselves in the spotlight for tax purposes can find it hard to get themselves out of it. It may have been that companies were being proactive rather than reactive in trying to do something that helps prevent them being in the headlines. It might have been that certain activities were moved to Ireland resulting in greater taxes being paid without an impact on employment or investment. The fear would be that if it is possible to have increased profits and increased tax payments seemingly happen on a very quick basis, those things could be reversed.

In 2015 and 2016, the fear was that it could have been a quick reversal. Here we are, however, in the middle of 2018 and the €6.9 billion collected in 2015 became €7.3 billion in 2016 and €8.2 billion in 2017. Not only have they not been reversed, they have actually increased. The warnings about a quick reversal have not materialised to date. We have just seen the receipts continue to rise. The focus tends to be on it because it was a level shift and lots of things happened in 2015 that sparked much attention. Our GDP surged as well. We had the famous 26% growth. Following that conversation with Deputy Boyd Barrett, I would not necessarily link those. We had an increase in GDP and the emphasis there should be on the first word - the gross part of GDP. That might not necessarily have led to increases in tax payments.

Some of those factors, however, that happened in 2015 might unwind but they may not all unwind at the same time. I refer to links to Irish companies, and their improved profits, the reduction in the number of companies claiming losses, the increase in tax related to capital transactions and various other things that all seem to have happened together in 2015. That 66% surge-----