Enda Kenny (Mayo, Fine Gael) | Oireachtas source

The Minister for Finance has been active on this matter. It is clearly an issue and I expect it will be discussed next week at the European Council. I expect that Mr. Draghi will be in attendance at some stage during the course of that two-day meeting and that he will deal in some detail with the threat as he has outlined it.

Deputy Martin is well aware of the importance of the corporate tax rate as a cornerstone for investment in the country. I can confirm from my meetings last week in the United States that the line of investment into the country is very strong. It is not a question about the rate of corporation tax because that has never been questioned. There have been discussions in different member states and sectors about the fluctuation in rates. Britain has had discussions about this and the Prime Minister has commented about the outcome of his intention to make a decision about the corporation tax rate in Northern Ireland once the outcome of the Scottish referendum is known. The question has never been raised about the rate of corporate tax. The Commission has given notice of launching an investigation into a number of countries, the Netherlands and Luxembourg and, in the case of Ireland, in respect of Apple.

Last week I had a meeting with the senior personnel in Apple in California. This is about a specific technical issue, about a specific instance for a company, which is that any company is entitled to speak to Revenue in respect of the options that might be considered when making a decision to invest in Ireland. The question of the corporate tax is one of statute-based law and is not one that allows for specific deals for any individual company. This is an important point. The Government on behalf of the country will defend this very robustly in that our legislation is statute-based and we believe it is ethically implemented and that therefore it does not constitute a state aid. The announcement by the Commission is in respect of its intention to look at a specific issue of a technical nature related to one particular company and it is not dealing with the rate of corporate tax as it applies.

In reply to the Deputy's other question, I refer to the role of the OECD in respect of base erosion and profit shifting. Most companies that use these BEPS strategies to reduce the amount of tax they pay take advantage of mismatches or different rates and regimes between the tax rules in different countries, making it difficult for any single country to fully address the issue. There is a need to provide an international and a joined-up approach which would reinforce domestic efforts as well as protecting tax bases and providing comprehensive international solutions to the problem. That is where the OECD comes into play in that it is co-ordinating an international response to deal with these challenges through its BEPS project.

The OECD BEPS action plan published in July 2013 sets out 15 specific actions to deal with the problems of base erosion and profit shifting. The plan provides a timetable for the completion of these various steps spanning five separate areas, namely, the digital economy, coherence, substance, transparency and the formulation of a new multilateral instrument. The timetable for their completion is from September this year to December 2015. The fundamental goal of the project is to better align and the right to tax with real economic substance and activity. This issue of substance and taxation is a core pillar of the Irish taxation system. That is the reason the BEPS project is consistent with our tax strategy.

We fully support the important work of the OECD. This is an issue which is not limited to any one country, rather it represents a global challenge involving a wide variety of jurisdictions and companies and it accordingly requires a globally co-ordinated response such as that led by the OECD. We are committed to the process underway to ensure that what is termed the global architecture is fair and seen to be more equitable. We welcomed the original report in February 2013 which identified the problems and challenges. We fully support the action plan subsequently published in July 2013.

Deputy Martin also referred to the question of youth unemployment and youth employment which is an issue in a number of countries. The OECD published tailored recommendations for each individual country. A number of Ministers attended that meeting to meet with the specialists in each area. Depending on the nature of the conversation, they recommended schemes or activities to deal with youth unemployment in the various countries. For example, a comprehensive review of the apprenticeship system was undertaken and has been completed recently. It examined apprenticeship training systems with a view to providing an updated model of training that delivers the necessary skilled workforce to service the needs of a rapidly changing economy. That review was progressed by an independent group which has made a series of recommendations and which prepared a comprehensive framework for a future expanded system of apprenticeship in Ireland. It suggested that the current system could be expanded to a number of other industries, including the ICT sector. For example, I met two companies last week and both said that they could employ 1,000 software engineers in the morning if they were available but we do not have them.

The taxpayer provides substantial funding for the board of SOLAS to be delivered through the new educational opportunities structures. It is a question of how to structure the apprenticeship training schemes to provide for industries requiring large numbers of trained personnel. The group also made recommendations about the existing apprenticeship trades. It was suggested that programmes should provide for the integration of various skills such as literacy, numeracy, mathematics, science, ICT and that these should be designed to equip the participants for progression to the next level. The Minister for Education and Skills, Deputy Quinn and the Minister of State, Deputy Cannon, agree with this policy.

Deputy Martin asked what actions are being taken to address the skills gaps in higher education. The Government and the OECD both recognise the importance of ensuring that Irish workers have the necessary skills to deal in a modern 21st century economy such as ours. We have the highest rate of tertiary enrolment in the EU and at 45%, Ireland has the third highest proportion in the EU of higher education students studying science and mathematics and ICT. I acknowledge Deputy Martin's involvement when he was Minister for Education. It was a good policy.

See this speech in context