Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I drifted from the question Deputy Martin asked about tax.

Governor Brown was speaking at an event in San Francisco attended by representatives of 20 small companies from Ireland who had been through a boot camp here on how to present their cases for investment by venture capitalists. I was very taken by the scale and nature of the presentations, ideas and propositions the companies put forward, sponsored and assisted by Enterprise Ireland. A number of them will certainly make serious headway in the time ahead.

On the point raised by the Deputy, this is a question of being very robust and strong in defence of our corporate tax system. He is correct to say these issues vary from country to country and sector to sector, depending on location. Our tax system is perfectly legitimate, statutorily based, ethically implemented and will be defended strongly by the Government if the concerns expressed by the European Commission are moved. Our corporation tax rate is not in question. We have had it since the 1950s and it is a cornerstone of what we offer to have a competitive rate of corporation tax. Unfair competition in taxation is an issue that must be addressed and the appropriate fora for this are the EU code of conduct on business taxation and the OECD's forum on harmful tax practices.

We published Ireland's international tax charter on budget day as part of the country's international tax strategy and reaffirmed Ireland's commitment to actively contribute to OECD and EU efforts to tackle harmful tax competition. We have made the point that the digital world has moved far ahead of the legislative world. For that reason, 15 sectors were identified and Ireland contributes enthusiastically with all other countries to these sectors to obtain an international response to an international phenomenon. On foot of a perception of reputational damage, the Minister for Finance abolished the stateless concept in the last budget. As a result of its own research, the OECD has indicated that it is in favour of tax competition. Pascal Saint-Amans, the director of the OECD Centre for Tax Policy and Administration in Paris, stated recently that what OECD member states were concerned about was not low tax but zero tax or situations in which all profits and intangibles, including intellectual property, ended up in jurisdictions in which not only was there no tax but no business activity. Obviously, the situation in Ireland is that multinationals employ considerable numbers of people. It is not a matter of having a brass plate on a door indicating an issue. The OECD's base erosion and profit shifting, or BEPS, project will address the opportunities for locating profits in jurisdictions without co-locating actual business in the first instance.

Ireland will adopt a very strong defence of its tax position, including our rate of corporation tax, its legitimacy and the efficacy of its implementation. The matter was raised in a general sense by a number of companies. They like to have clarity in America and horizons against which they can plan. They like to know that Ireland's system is statutorily based and that the rate of corporation tax is not under observation or being considered.

Governor Brown has made a dramatic impact in his three years as Governor of California. He has shifted it from having a €27 billion deficit to a point where there has been significant economic progress. It was not without some very decisions being implemented in California. There are places in San Francisco where one can see houses which are highly priced with homeless people lying outside in significant numbers. I was speaking to a young person who worked for one of the major IT companies in Palo Alto and who lived in a very small bedsit, the rent for which was approximately €4,000 per month. That places serious pressure on housing in the city. Governor Brown and I had a good discussion. He was here last year and called to see me. He wants to come back again. He has strong connections with Ireland on foot of his ancestors' origins in Tipperary.

The impact of the companies projecting for business is very strong. Members can be very proud of how they are presenting their cases. Many of them will make significant progress.

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