Dr. Eddie Casey:

Dr. Aidan Regan and Professor Sam Brazys have done some work on the phantom nature of some of this FDI-led activity. They tried to assess the phenomenon on the basis of the volatility of some of the receipts. That is a good way to look at this issue, but is it hard to say which activities are genuine and which may be phantom. Examining volatility is a good way to approach this issue, but it does not give us the full story of whether there is anything behind this type of activity. Profits in the major multinationals which move to this country and locate their activities here can be really volatile anyway. There can be huge transfers in a good year.

I do not know how to determine levels of phantom activity. It is an exceptionally difficult question to answer. We have tried to get around this issue by asking where corporation tax receipts would be now if, after 2014 or 2015 when they accounted for their normal share of tax receipts, they had grown in line with the domestic economy. That is a useful way to think about things on a fundamental basis. What level might we return to in a more normal situation is a useful question. That is where we come up with these estimates, such as the €3.5 billion mentioned by Mr. Barnes earlier, of how much corporation tax receipts could fall in future. These are the ways in which we think of this but it is an exceptionally difficult area in which to gain a true insight because of major uncertainty and the high level of confidentiality around individual companies and activities.