Mr. Seamus Coffey:

Why did the OECD start the base erosion and profit shifting, BEPS, project? It happened due to a G8 meeting of large countries, including France and Germany, that were under budgetary pressure and looking for increased revenue. They said the rules for the taxation of international companies had to change and let us get somebody to do something about it. They got the OECD to do something about it and that has been done through the BEPS project. Now, the question of who won from that project is being looked at. Thus far, Ireland has been a significant winner. There could be a second round of BEPS and it may look to see what factors caused Ireland to win and whether it could be changed again?

On Irish companies, the profits of some of those previously mentioned would not be wholly part of the Irish tax base. A company in the construction sector will have tax due where the construction activity happens. The airline industry is slightly different. When it comes to domestic flights, the tax due on those profits is due in the country in which the domestic flight occurred. If the flights are international, however - and it does not matter from what country they originate - the tax will be due in the country where that company is resident. If a company flies from England to France or Germany, and that company is resident in Ireland, then that company's profits will form part of the Irish tax base. They are an important part of the Irish corporation tax base. Ryanair, for example, makes €1 billion in profits per annum. I do not know how much of that is in the Irish tax base but much of it is.

It is dwarfed by the scale of profits that the multinationals are making here but it is significant. When we talk about Irish companies, we are not referring so much to Irish multinationals and their operations abroad - it more the SME and the pure domestic sector. I refer to trying to make those companies more successful and from an exporting point of view in particular. We may perhaps have drawbacks that have limited our ability to expand our exporting base. On losses, the treatment is well established around the world. I am not sure of the reputational damage but there is nothing unusual about using losses for companies.