Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I am glad the Minister for Finance is in the Chamber to deal with the issue of the OECD base erosion and profit shifting deliverables report 2014. I feel it is important to raise the issue in the Dáil at an early date. I am sure the Minister will agree that it is critical to provide certainty on Ireland's corporation tax regime. All of the main political parties in this House subscribe to the 12.5% corporation tax rate. However, as important as the rate itself is the corporation tax system, which is administered by Revenue and underpinned by legislation. There has been considerable speculation as to what the report means for Ireland in terms of changes the Minister might seek to make in the budget. I seek reassurance from him in regard to his intentions because we should be under no illusions - I am sure he is not - that Ireland is operating in a highly competitive environment when it comes to foreign direct investment. Ireland's corporation tax rate and system have been fundamental to our success in attracting inward investment over many years.

It has been clear for some time that our corporation tax system is in the spotlight and, in many respects, under attack. There was commentary, much of it inaccurate, at US Senate hearings and in the UK House of Commons, and a European Commission probe is ongoing into the treatment of one company by Revenue. It is important that Ireland moves in parallel with other countries. The OECD listed a number of countries as having harmful tax practices, but Ireland was not one of them. However, a head of steam appears to be building to the effect that Ireland will make a unilateral move on certain aspects of our system. The double Irish has been highlighted as a case in point. The questions I have to pose - I do not have all the answers - are what is the cost of doing nothing on the issue and what is the cost of acting on it. Would it be sufficient to signal a roadmap of changes that the Minister intends to make over the coming period in respect of our corporation tax offering?

It appears to me from my discussions with multinational companies, their representative bodies and their professional advisers that Ireland's corporation tax offering has become less attractive compared to the UK's offering in recent times. The UK authorities have upped their game considerably. I am getting that feedback from the companies concerned, and I am sure the Minister and his officials are getting similar feedback on the UK's move on the patent box, the reduction in its corporation tax rate and the manner in which it treats overseas profits from a corporation tax point of view. Ireland needs to play hard but fair, and Ireland needs to play to win when it comes to foreign direct investment. I am loth to see a situation in which we make unilateral moves before other countries change their systems. Compared to many other countries, Ireland's system is open, transparent and underpinned by legislation. The Minister knows full well the importance of the investment and employment that multinationals bring to this country. I want to see that supported and protected and if he is going to make any changes, they have to be in the context of an overall package of improving our corporation tax offering, such as in regard to the treatment of intellectual property and research and development. These issues are fundamental to companies seeking to invest in Ireland.

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