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

I am glad to have an opportunity to contribute to the debate. I was not involved in the discussion on this matter when it was before the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach. Deputy Cowen substituted for me at that stage but I have been briefed on the discussions, particularly of the Ghanaian double taxation treaty.

I want to signal Fianna Fáil's support for ongoing engagement with the BEPS process. We believe it is critically important that Ireland continues to play its role in international tax reform. We are cognisant of the whole issue of base erosion profit shifting, particularly around transfer pricing, royalty payments, the shifting of intellectual property, IT, and on-shoring. We saw the very dramatic impact of this on Ireland back in 2015. It is very important that we are leading on these issues.

The motion is very important in approving this convention, in effect ensuring that the double-taxation agreements we have already entered into are brought fully up to date and fully in line with OECD BEPS best practice. The Minister of State said the majority of countries with which we have a double-taxation agreement have signed up to the multilateral convention. That will modify the majority of the tax treaties when it comes into force. In the case of others which fail to sign up, the Government will move to deal with those on a bilateral basis.

I have also been briefed on the concerns Christian Aid has raised. The Minister of State touched on a certain aspect of them in his remarks. It is important that those points are addressed in the debate and that he keeps an open mind on further changes that may be necessary. On Committee Stage of the Finance Bill we can go into the fine detail of changes to the Taxes Consolidation Act and so on.

In his opening remarks the Minister of State drew attention to Article 12, relating to the permanent establishment rules for a company operating in a country through an agent. He made the point that he is reserving the Government's position on Article 12 because he does not believe there is sufficient certainty. I am not sure if the Minister of State gets to reply at the end of the debate, but if he does he should elaborate on what he is referring to there. In particular, what uncertainty has led the Government to the conclusion that it does not wish at this point to sign up to Article 12 on permanent establishment. I acknowledge his point that almost 60% of the countries that have signed the multilateral convention have adopted the same position on Article 12. It is important for the Minister of State to address that point.

Overall we believe we should continue to support BEPS. We should adopt the multilateral convention to bring the double-taxation treaties we have already entered into up to date and in line with BEPS best practice. It is an important step for Ireland and one the House should endorse.

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