Derek Nolan (Galway West, Labour) | Oireachtas source

I believe that Deputy Creed spoke to a different motion, as the one before the House is welcome, timely and positive and I thank the Deputies, particularly Deputy Maureen O'Sullivan, for introducing it.

I wish to address the idea of asking people to jump first. Almost €1 trillion in illicit financial flows left developing countries in 2011 for developed countries. This was facilitated by transfer mispricing, which is incorrect pricing between companies, false invoicing and hybrid mismatches of different types of tax treaty to the benefit of the developed countries versus the developing countries. This is seven times the amount of overseas development aid, ODA, that is given to developing countries every year. Let us realise that this is a serious issue. People have jumped first and are paying the price for it, those being, people in developing countries who are being starved of their own natural resources, which are travelling to developed countries.

The BEPS process is positive and, if we want it to, has the ability to achieve an outcome that leads to the type of international financial architecture that produces what we need. Alternatively, the process could be restrictive, selective and mealy-mouthed to give the impression that we are doing something right.

The issue was never with Ireland's corporate tax rate of 12.5%. The issue was with how people were able to manipulate the tax structure via our tax residency rules. For example, creative licences held in other countries could be racked up in an American tax system that did not recognise tax residency in Ireland. Anything that was earned elsewhere could be funnelled through Ireland without tax being paid on it. Tax was paid on anything earned in Ireland, so our rate was not the issue. Rather, our tax infrastructure, when interacting with another country's infrastructure, allowed for a loophole. Perhaps the criticism of us was not because of our 12.5% rate, but because we did not close the loophole even though we knew that this system was in place. The same argument could be made against the government of the other country that was a party to the system, namely, the US, which also knew that its tax code facilitated the same loophole.

How we account for royalty payments, patents and intellectual property is an issue. We claim that none of the value is held in other European countries because the only aspect that matters is the intellectual property, which is held in Ireland - not the building of the iPhone, the packaging, the marketing or the selling - so no tax is due in other developed countries. If BEPS and the OECD process do not solve this basic unfairness of funnelling profits into a country like Ireland, using this system not to pay tax and putting money in offshore tax havens like Bermuda, they will not be worth the paper on which they are written.

We must consider another step. As this issue affects everyone around the world, we should be considering a human rights-based approach to tax. If one wishes to vindicate people's economic, social, cultural, civil and political rights, money is required. As someone once stated, we have set up the ugliest economic affairs since slavery, in that the tax system allows money to be taken out of developing countries where people are dying. Some $100 million recovered from this type of tax evasion could immunise 4 million children and save their lives. It is estimated that, between 2001 and 2015, some 5.6 million young people died because of the revenues lost due to the tax issues of transfer mispricing and false invoicing. Ireland has played a part in that. The scary aspect is that it does not need to be Ireland. Owing to the way that the system is set up, the revenue could be moved again. It is good that we are closing the double Irish, as it can be circumvented by a company being based offshore in Bermuda or in Malta where royalties or patents are not taxed. The double Irish can be fixed in the morning. The idea that we have closed it is not accurate.

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