Robert Troy (Longford-Westmeath, Fianna Fail)

Regardless, as I mentioned in my opening statement, capital allowances for intellectual property are a normal part of any tax system. The tax system provides relief in the form of capital allowances against trading income for capital expenditure incurred on the provision of intangible assets for the purposes of trade, both acquired and internally developed. IP allowances may only be deducted from income generated by those assets and a cap applies. A maximum of 80% of relevant profits may be offset by capital allowances in any year, which is below the EU average of almost 82%. Intellectual property is an important aspect of any modern multinational enterprise, but especially in the IT and pharmaceutical sectors, as the Deputy is no doubt aware.

Recent years have seen a substantial period of reform through the OECD BEPS programme which has resulted in real changes to global multinational activities, with firms moving away from locations with little substance to key centres in their value chains including Ireland, as activity in tax havens is wound down. Ireland has continued to implement many reforms to our tax systems in recent years, including the introduction of the EU anti-tax avoidance directive and defensive measures on outbound payments and we are fully compliant with the OECD standards of transparency and exchange of information about tax measures. Ireland has been to the forefront in implementing the OECD international tax agreement which seeks to address the tax challenges arising from the digitisation of the economy. Ireland has implemented the agreed OECD Pillar Two minimum effective taxation rate of 15% and we remain deeply engaged in the ongoing work to finalise Pillar One of the agreement. Our long-standing position remains that the international tax system needs to keep pace with how business is now conducted globally.

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