Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

Eight questions in total have been linked to the Taoiseach's visit to the OECD in Paris. I put it to the Taoiseach that right now, there is something close to panic in Europe about the threat of deflation and its potential dramatic impact on growth. What is somewhat incredible is I have yet to hear from the Taoiseach a single word on the threat the impact of deflation across Europe represents for Ireland. When replying to me, can the Taoiseach explain why he has not made a public statement on this issue?

The OECD recently published an evaluation of the Action Plan for Jobs and the Government's press release in this regard probably was one of the most deliberately misleading, in a long line of over-hyped press releases, to which Members are used. I believe the Government press release stated the OECD had said the action plan was delivering tens of thousands of jobs but of course the OECD said no such thing. It stated directly that it cannot state how many, if any, jobs came from the action plan and that the improving international economy has been by far the biggest driver of jobs growth. However, this is what tends to happen with press releases. The OECD also criticised the lack of progress on youth unemployment, which is a particular scourge at this point in time, both in this country and across the European Union. What is important is to tell it as it is to people, because people are somewhat fed up with the over-spin on a general basis, because it does not accord with the daily realities they face in respect of employment, life, incomes and so on.

As for the corporation tax issue, I believe one must state in an assertive way that Ireland's corporation tax rules are in accordance with OECD guidelines on taxation. In his reply, the Taoiseach has stated the issue of corporation tax was discussed with the OECD. It appears to me that the OECD does not necessarily have a problem with Ireland's regime or framework. I put it to the Taoiseach that he has not been proactive enough in making the case definitively for retaining autonomy in setting our own corporate tax rate, as well as having flexibility in our tax structure in general, both in respect of inward investment and to encourage entrepreneurial activity. Does the Taoiseach accept that the disparaging references in the United States Senate and the House of Commons to Ireland's corporation tax regime have caused significant reputational damage to our tax system? In addition, does he accept they potentially have created challenges for Ireland in respect of foreign direct investment into the future, in that they are undermining certainty about our framework into the future? I put it to the Taoiseach that the Government has not treated this issue with the seriousness it deserves since the initial European probe was launched nine months ago. I believe the Government has been complacent and dismissive and I do not believe it has allayed the concerns of the European Union to prevent a formal inquiry.

One must repeat there are no special corporate tax rates in Ireland. There are rules on how taxable income is calculated to determine the figure to which the 12.5% rate is applied and they are set out clearly. The Taoiseach and I are both aware but I ask him to confirm that companies such as Apple, for example, eventually will pay 35% in corporation tax when global profits are repatriated to the United States. The problem for the United States is that companies are deferring indefinitely this tax by holding the money offshore and not repatriating it. Does the Taoiseach accept this is a United States problem, not an Irish problem? It is facilitated by an exemption granted by the United States, rather than by any provision in the Irish tax code. The headline corporation tax rate is only one consideration in assessing a country's corporate tax regime.

I ask the Taoiseach to provide details of the discussion he had with the OECD about the taxation question. I refer to BEPS - base erosion and profit shifting. I ask him to confirm that the international trend is to cut corporation tax rather than increasing it. I have noted what is happening in the United Kingdom with the patent box and its stated aim to reduce its corporation tax in an attempt to attract inward investment. Would he agree that a one-size-fits-all tax regime would not work for Europe? I refer to last week's press release from the Department of Finance which stated that the subject of transfer pricing up to 2010 was being examined and that the corporate tax rate was not being examined by the European Union. I ask him to outline to the House what has the European Commission told the Government in this regard. What does the Government propose to do in response to the EU probe?

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