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

Fianna Fáil supports the introduction of the knowledge development box, KDB. We discussed it on Committee Stage when the Minister of State, Deputy Harris, was present. I made the point that the ultimate measure of success for the KDB was whether new investment, research and development and employment creation occurred. The Minister has factored in a full-year cost of €50 million for the KDB, but if it is successful, it will lead to additional revenue because multinational activity that is not currently happening in Ireland will be transferred to this country. That is what we want to happen. This should not be a question of reclassifying under which tax heading certain profits are taxed, namely, from the 12.5% rate to the 6.25% one. Rather, it should be concerned with positioning Ireland to enhance our attractiveness as a destination for inward investment. For many multinationals, research and development is a touchstone issue. It is how they decide where to locate their investments.

Much has been stated in the House about Apple and its corporation tax arrangements, but I wish to put a fact on the record. In the past two weeks, Apple announced a further 1,000 jobs in Cork city, which will bring to 6,000 the number of people employed in Cork by Apple. This is not a brass plate operation based in the Cayman Islands or Bermuda. It is a real company that employs ordinary people and helps them to sustain their livelihoods and pay mortgages. That reality is often forgotten in this debate.

Along with other Deputies, I served on the global corporation tax sub-committee, which was chaired by Deputy Twomey. We examined in detail the legitimate issues that have been raised about profit shifting. It became obvious to me that the key issues were transfer pricing and the shifting of profits from one jurisdiction to another through royalty payments on intellectual property, with the aim of those profits ending up in places where there was no corporation tax, namely, Bermuda, the Virgin Islands, the Cayman Islands and so forth. Ireland cannot address that issue on its own. Ireland will co-operate with the base erosion and profit shifting, BEPS, process and undertake steps alongside our international partners to deal with this type of aggressive tax planning. We all want to see multinationals paying as much corporation tax as possible, but Ireland is not in a position to solve the problem in isolation. Instead, we can have an attractive offering for multinationals that are seeking to invest in Ireland or copper-fasten the existing investments and employment that many of them provide.

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