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

It is appropriate that we debate, scrutinise, critique and question our corporation tax code in all its respects. However, we also need some balance in the debate. It should be acknowledged that Ireland has been to the fore in terms of the OECD BEPS process and the reforms at an international level that are being introduced. Undoubtedly, there is a journey to travel; there is no question about that. However it should be acknowledged that several of the items referenced in amendment No. 34, which proposes to introduce these items in a report, are described as tax loopholes. In fact, they are legitimate tax deductions. They are based on our corporation tax code, which is in statute.

We have a broad base in respect of the calculation of taxable profits. We have limited deductions in Ireland. We heard that evidence when we examined the common consolidated corporate tax base proposals. Other countries have higher headline rates but lower effective rates because they have a far more expensive way of reducing their taxable profits.

We should acknowledge that we have no God-given right to inward investment in this country. We have no God-given right to be boxing far above our weight in terms of jobs, investment and so on. Let us make no mistake about it: what is at play here as well is a desire by other countries to win over the investment, jobs and tax receipts that Ireland is getting.

The flagship reform in corporation tax that is proposed by the European Commission is the CCCTB. The Commission is proposing that the distribution of where taxable profits are taxed and where corporation tax is based would be on the basis of where the assets are, where the jobs are and where the sales are. How would Ireland fare in that context? It would not fare well at all and we would not be long in seeing our corporation tax receipts, which amount to approximately 15% of all tax income in the State, getting a fair whack rather quickly.

We need to have certainty. I do not support amendment No. 34. I believe it would introduce great uncertainty. I believe it conflates several issues by describing legitimate tax deductions, in some cases, as tax loopholes. If we were to announce a great review of our corporation tax code, including all of these individual items, it would introduce uncertainty.

I liaise with representatives of multinationals on a regular basis. Their contribution to the Irish economy is considerable, with 200,000 direct jobs provided by foreign-owned companies in this country. Many more jobs arise from indirect employment as well in support services, suppliers and so on. There is no problem in critiquing or going through our corporation tax code and playing our part in the reforms - I fully support that. However, we should not seek to open up an entire rewriting of the corporation tax code. It has been an important element in Ireland doing so well with inward investment.

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