Leo Varadkar (Dublin West, Fine Gael)
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Question 55: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her views on the impact of the Obama Administration's recently announced tax reform on foreign direct investment here; and if she will make a statement on the matter. [20226/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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As the proposed tax changes outlined by the US Administration on 4 May were proposals rather than detailed draft legislation, it is not possible to definitively state what the effect will be for US foreign direct investment in Ireland. However, the stated intention of the Obama Administration is primarily to target US companies which invest in countries widely considered to be tax havens. Ireland, of course, is not a tax haven nor is it considered as such by the US Government.

The Minister for Finance and I have already briefed our Cabinet colleagues on the proposed changes. Given that more than 450 American companies have already invested more than $55 billion in Ireland, we are acutely aware of the importance of potential changes to the US tax code on American investment abroad. I recently met the US Secretary of the Treasury, Mr. Timothy Geithner, and several members of the US Administration. The Government is committed to maintaining contact with the US Administration in the time ahead.

The Government has maintained a monitoring system for developments in the US international tax code for a number of years. In addition, a contact group comprising senior officials from my Department, the Departments of Finance and Foreign Affairs, the IDA and the Revenue Commissioners has been meeting to monitor ongoing developments. We will continue to engage with the US Administration and Congress as this issue develops and the initial proposal evolves into legislation. To this end, the IDA has deployed a senior executive to the Irish embassy in Washington as a point person to monitor and engage with this issue.

Leo Varadkar (Dublin West, Fine Gael)
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I note that the Tánaiste is alone today. I am aware that her junior ministerial ranks have been somewhat depleted by the recent decision to reduce the number-----

Mary Coughlan (Donegal South West, Fianna Fail)
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One of my Ministers of State is in Russia and another is in Bahrain. I sincerely hope another man is crossing the road.

Leo Varadkar (Dublin West, Fine Gael)
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I hope they are not doing a Deputy McGuinness and leaving her on her own.

Mary Coughlan (Donegal South West, Fianna Fail)
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They are doing work on my behalf and on behalf of the State.

Leo Varadkar (Dublin West, Fine Gael)
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I am delighted to hear that.

As the Tánaiste noted, multinational investments, particularly by US owned corporations, are extremely important to Ireland. These corporations employ approximately 100,000 people. A number of large investments have been made in my constituency of Dublin West by firms such as IBM and eBay. I agree with the Minister that Ireland is not a tax haven but I am concerned that only four countries or territories were named in the document released by the White House - Ireland, the Netherlands, the Cayman Islands and Bermuda. Ireland is called a low tax jurisdiction, not a tax haven, in the document. In her discussions with Mr. Geithner, Secretary of the Treasury, did she express her concern that Ireland was put in the same group as the Cayman Islands and Bermuda?

I hope the Minister will not drop the ball on this potentially important matter. She intervened much too late in the process at Dell and SR Technics to have an effect. If she and the Government are to have influence, it is important they become involved with the US Congress and Administration to lobby them regarding these tax proposals. Will the job that is to be done through the embassy also be done through the IDA? Will there be a focus on lobbying the Irish-American caucus in Congress, which, while not as strong as it was in the past, should still be briefed about our interests and asked to support them?

Mary Coughlan (Donegal South West, Fianna Fail)
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I am glad the Deputy appreciates there is FDI investment in his constituency. He will, therefore, be acutely aware of the implications this decision has for his constituency, not to mention Ireland. On the occasion of the Taoiseach's visit to the US, he mentioned this issue to President Obama. I met Secretary of the Treasury, Mr. Geithner and we had a 35-minute discussion on a number of issues but this was the primary reason I met him. I also met my opposite number in the Department of Labor and Ron Kirk to discuss these issues. I then took the opportunity over a day to meet a number of the key leaders in the US Senate and Congress and members of the ways and means committee, which will make the final determination on Capitol Hill.

I, along with all my ministerial colleagues who travel to the US, will continue to raise this issue. I also met representatives of a number of corporations on my two visits to the US and we are working with them in the US and in Ireland. We have always had the number one tax experts in the US. They have worked with the IDA and will continue to do so and we have redeployed a senior executive from the IDA to work exclusively on this.

This is a hugely important issue and we will continue to use every avenue available through corporate America, through our corporate presence here and the platform we have here and at political level. A congressional delegation will travel to Ireland in the summer and it was my clear intention in speaking with Congressman Neal that we would have a further opportunity to develop the issue and I am sure Members will do likewise.

Leo Varadkar (Dublin West, Fine Gael)
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I appreciate the Minister's response but I would like specific answers to my questions. Did she raise with Timothy Geithner the fact that Ireland was one of only four territories named in the report? One of the specific examples given related to the US wanting to end the system whereby companies investing in an unnamed country with a 12.5% tax rate are able to offset the cost of building facilities against their tax liability in the US. Did the Minister mention to Mr. Geithner that she was unimpressed Ireland was named among the four territories?

I am glad Ministers and officials will raise this issue with members of Congress at every opportunity but that is not good enough. A concerted lobbying campaign of Congress members is needed. Is a strategy in place to do so or will an ad hoc arrangement be adopted every time there is a visit back and forth?

Mary Coughlan (Donegal South West, Fianna Fail)
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I discussed the tax haven issue with Secretary of the Treasury Geithner. Two taxation Bills have been introduced in the US Senate - one contains a list of 34 countries in which Ireland is not included and the other is based on a report prepared for the US Congress and released in December by the US Government Accountability Office, GAO. The GAO's determination is based on figures from the 1980s. The Irish ambassador to the US has written to the Department of the Treasury on our behalf expressing concerns about the matter of our inclusion in the report. We feel the inclusion is unjustified and we have set down the reasons for that. However, I took the opportunity to express the Government's view to the secretary on it.

This is not an ad hoc matter and a group in my Department is working on it. The ambassador, as our representative in the US, along with senior executives in the IDA will work ad infinitum to deal with this issue. The IDA's role is to work with companies who are also lobbying in the context of this legislation.