Dáil debates

Wednesday, 15 September 2021

Saincheisteanna Tráthúla - Topical Issue Debate

Tax Code

Photo of Seán FlemingSeán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank Deputy Nash for the opportunity to address the report on behalf of the Minister, Deputy Donohoe, this evening. From the outset I must point out that, while the Deputy has mentioned the name of a particular company and has gone into its tax affairs in detail here in the Chamber, people will understand that it is absolutely not appropriate for the Minister for Finance to comment on the tax affairs of individual businesses. That is a basic law and understanding of how this Parliament should work. A Minister should not be going down the road of talking about the tax affairs of a named individual business or individual person.

Recent years have seen significant progress in global action to address the issue of aggressive tax planning by multinational companies. Ireland has fully engaged in the base erosion and profit shifting, BEPS, process since 2013 and we have proactively and diligently reformed our tax code in line with emerging new international norms. A lot has already been achieved. We must recall that, today, we have far more robust international tax rules and safeguards to prevent abuse, arbitrage, base erosion and profit shifting than existed a decade ago. Significant progress has been made.

In respect to the issues highlighted in the Christian Aid report, it is relevant to note that the Revenue Commissioners entered into a competent authority agreement with the Maltese competent authority, its Ministry of finance, to counteract so-called single malt arrangements that could otherwise result in double non-taxation. At this late hour of the night, people will forgive me for specify that when I mention "single malt", I am not talking about whiskey. The word "single" relates to a business that has single residency in an area. The word "malt" is short for "Malta" rather than having anything to do with whiskey, in case people thought that was what we were talking about here tonight. Specifically, this competent authority agreement addresses issues where there is a mismatch of residence and domicile provisions which could otherwise result in double non-taxation. I am advised that this competent authority agreement provision is operating as intended and companies should not be able to avail of double non-taxation on the basis of a mismatch of residence and domicile provisions.

The Minister is committed to taking action to ensure the Irish tax code is in line with new and emerging international tax standards as agreed globally. The January 2021 update to Ireland's corporation tax roadmap highlights the actions that have already been taken, and which will continue to be taken, in this process of corporation tax reform.

It is important to remember that in recent Finance Acts the Oireachtas has substantially progressed transposition of the anti-tax avoidance directives through: the introduction of controlled foreign company rules, anti-hybrid rules and a revised exit tax regime; the introduction of defensive measures against listed jurisdictions through enhanced controlled foreign company rules; the updating of transfer pricing rules; the introduction of legislation for OECD BEPS measures on mandatory disclosure rules; and a substantial widening of the scope of the exit tax regime with the result that, on the migration of a company from Ireland to another country of residence, the increase in the value of assets to the date of the company's departure will be chargeable to the full rate of corporation tax. It should also be recognised that Ireland has a long-standing general anti-avoidance rule which goes beyond the standard required by the EU anti-tax avoidance directives. Furthermore, in the upcoming Finance Bill, it is intended that we will complete the transposition of the anti-tax avoidance directives with the reintroduction of interest limitation rules and anti-reverse hybrid rules. It is intended that these rules will be effective from 1 January 2022.


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