Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

Questions were raised around whether tax treaties are beneficial to developing countries. Double tax agreements provide tax certainty for taxpayers and tax administrators and they reduce tax barriers to cross-border trade and investment. This ensure that the best conditions with respect to eliminating double taxation are eliminated to enable trade and investment to occur. Documents were mentioned which noted that the academic literature in 2012 was inconclusive in respect of the outcomes from this facilitation of trade and investment. Since then, Ireland has commissioned and published its own independent spillover analysis, which made clear that there are no negative spillovers on developing countries from Ireland's modern tax treaties. It is also clear that Ghana strongly believes that such treaties benefit its economy.

Ghana has double taxation agreements with 16 other countries, including Belgium, Denmark, France, Germany, Italy, the Netherlands, South Africa, Switzerland and the United Kingdom. I was asked whether Ireland had carried out any spillover analysis on this specific treaty. A specific spillover analysis was not carried out before entering negotiations with Ghana. However, the results of the broad spillover exercise carried out in 2015 did not find evidence of negative effects from Ireland's modern tax treaties. We would expect that the same result would apply to the treaty with Ghana. I am not aware of any country carrying out a spillover analysis about how an agreement might affect the other country in advance of said agreement being negotiated. It would be difficult, if not impossible, to accurately assess this in advance of an agreement being reached and data being available as to its impact.

The Ghanaian authorities believe this treaty is a good deal for Ghana. I have no reason to believe they are incorrect. Accordingly, I cannot support the amendment proposed by Deputies Eamon Ryan and Catherine Martin to ask for the Department to report to the Dáil on ongoing international discussions with Ghana on updating the double tax agreement. It is a long-established practice internationally that countries keep the details of ongoing negotiations or discussions confidential. It would be highly inappropriate to comment in the Dáil on Ghana's views or responses to us without its consent. It would damage Ireland's credibility as a negotiating party for any international tax agreement. As stated earlier, we have written to Ghana previously as to how it would prefer to update the treaty to include the BEPS measure. We will continue to follow up on this.

The amendment proposes that Ireland insists that the treaty be amended to include clauses or changes which the Deputies believe to be in Ghana's interests. The Ghanaian tax authorities, however, did not seek these clauses or changes during negotiations. The treaty does include UN model provisions which Ghana sought during negotiations. It is inaccurate to assume all developing countries want all UN model provisions to be included in all treaties. The Ghanaian negotiating team was led by a member of the UN Committee of Experts on International Co-operation in Tax Matters which is responsible for the design of the UN model provisions and was well placed to determine what was or was not in their interests. It would be unusual and inappropriate for Ireland to insist that Ghana accepts clauses that it does not want based on the presumption that Ireland knows what is best in its interests.

This is a bilateral agreement reached between Ireland and Ghana. It has been signed by both countries. Over two years have passed since negotiations concluded and we have received no indication that Ghana has any concerns with the content of the agreement. Failure to ratify the agreement would reflect poorly on Ireland as a negotiating partner for any bilateral tax agreement. This is a fair and balanced agreement which should benefit both Ireland and Ghana.

I commend the motion to the House.

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