Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I move amendment No. 1:

To insert the following after “13th September, 2018”:

“and that the Department of Finance shall report back to Dáil Éireann within one month on:

- what measures the Department of Finance will be taking to prevent the use of tax structures commonly known as the ‘Single Malt’, beyond its reliance upon United States tax reforms;

- what measures the Department of Finance will be taking to prevent companies from avoiding a permanent establishment in jurisdictions where their agents make sales and then booking the resulting sales income as the income of an Irish company;

- what actions the Government is taking to amend bilaterally its double taxation conventions with other states that have declined to adopt Article 4 of the Multilateral Convention to Implement Tax Treaty Related Measures Order 2018, in order to ensure that the tax residence of Irish-registered companies is determined in accordance with Article 4 of this Convention or with section 43 of the Finance Act 2014;

- precisely which areas of the application of Article 12 of the Multilateral Convention to Implement Tax Treaty Related Measures the Department of Finance regards as continuing to be uncertain, given the completion of additional guidance under Action 7 of the Organisation for Economic Co-operation and Development base erosion and profit shifting project on the attribution of profits to permanent establishments, and the publication of this additional guidance on 22nd March, 2018; and

- the reasons why the Department of Finance regards the application of Article 12 of the Multilateral Convention to Implement Tax Treaty Related Measures to be more uncertain than the application of the other articles of this Convention which the Government is adopting through the Multilateral Convention to Implement Tax Treaty Related Measures Order 2018.”

The amendment addresses the concerns raised on all sides of the House regarding the Government opting out of Article 12 of the convention. As noted by many speakers, the convention is one we agree with, but the amendment seeks to express the concern that in opting out of that article, we are leaving a loophole. The amendment is structured in such a way that it will not stop the ratification of the convention by Ireland but asks that the Department of Finance would report back to Dáil Éireann, which is a reasonable and rational check in the context of the concerns we have.

It asks what measures the Department of Finance will take to prevent the use of tax structures commonly known as the single malt. While the Minister of State says that does not apply to Article 12 and that Article 4 covers us, we read in the newspapers - I commend the work of Christian Aid - of the specific example of US companies based between here and Malta that are able to do the trick that has been done for many years, particularly in respect the large profits from intellectual property, and transfer them to an area where they are effectively not taxed and the end point is that the company pays low single-digit tax returns. That has to stop. We have to close those loopholes. The concerns we have echo those of Christian Aid, which are welcome. We need to hear from the Department what measures it has in place to stop it.

We need to hear from the Department what measures it will take to prevent companies from avoiding a permanent establishment in jurisdictions where their agents make the sales but the resulting sales income is accounted for as the income of an Irish company. We need the Government to outline what steps it is taking bilaterally on double taxation conventions with states that have declined to adopt Article 4, which the Minister of State cited as a concern. Within this motion, we need to insert mechanisms whereby we hear back specifically what the Government intends to do to avoid such loopholes continuing and to ensure that Irish-registered companies cannot use such loopholes to avoid tax being paid in any jurisdiction. The motion asks the Minister to report back on exactly which areas of the application of Article 12 he regards as continuing to be uncertain, given there is no clarity on that and there are no specific reasons why we are opting out of it. We need to know the reason the Government regards the application of the article to be more uncertain than the application of the other articles of this convention which the Government is adopting through the tax treaty-related measures order.

While that is complicated, the amendment is not specifically designed with a view to blocking or hindering transparency but to informing and improving it. We need this because this country is being damaged. Our reputation has been seriously damaged within the EU and further abroad because we have allowed and facilitated the aggressive tax avoidance measures that are driving political anger and public distrust, and an undermining of public services. It simply has to stop and we have to be seen to lead.

The failure to apply Article 12 within this motion is a retrograde step. The motion should be redesigned to give the Government a chance to restore our reputation, provide much greater certainty and clarity in how we implement the treaty. I will look for support to make that amendment when we press it later on.

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