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

I know it is a touchy subject and that he is nervous about this announcement. In respect of our offerings to those who are looking to invest in Ireland, corporation tax is a vital tool. He stood over the 12.5% rate, which our party has long supported, and we welcome his statement in that regard. However, this is not some theoretical debate about tax planning or the morality of multinational companies. It should come as no surprise to us that multinational companies will employ the best tax practitioners in the world in their efforts to minimise their global corporation tax liabilities. Two years ago, the Minister told this House that the double Irish had nothing to do with Irish law and it must be something to do with other jurisdictions and US law. I have his exact comment but I will not waste my limited time reading it out. He has made a change which affects the offering that Ireland is making in respect of corporation tax. I worry about that because it introduces uncertainty. Let there be no mistake; this is a debate about jobs and investment. Other countries will not be satisfied with the change that he has made. He pre-empted the BEPS process before it concluded. We have had an interim report but no final report. The Dutch, who are also under the spotlight from the EU, have announced that they will not make changes until the process is complete. I am all for improving the global corporation tax regime to make it more transparent and reconstructing it so that multinational companies pay more tax but this must be done on the basis that every country moves in tandem. That is not happening.

The Minister spoke about a new intellectual property regime which will have to go to the European Commission. Two years ago he sent a much more modest proposal on the living cities initiative to the European Commission but he is still awaiting a decision on it. That will give no comfort to multinationals considering investments in Ireland. What he has done is a mistake and the certainty we have built around our corporation tax offering is beginning to crumble. When multinationals are deciding where to invest, they see the UK stepping up its game by introducing a patent box irrespective of what Europe says, bringing down its headline rate and streamlining the way in which foreign profits are taxed. Then they look at Ireland shivering under the pressure from Europe and others, and making a change before there is international consent on the direction that should be taken.

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