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Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: If I have a gardener, he can cut hedges as well as grass. I am not going to put out a tender for a hedge cutter, just because I have not seen him cut them before.

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: The main question is what is the Department's calculation of the cost of these managers and infrastructure, and who is paying for it?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: On the basis that it is commercially sensitive and our job is the oversight of taxpayers' money, we are interested to know if there is no calculation of it; if the Department cannot share it, it is one thing. Why is there no calculation of it? There is a clear exposure to the State? How much to these people cost? How much does the infrastructure cost? That is a cost incurred by the State...

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: Yes, it is about our former colleague, Deputy Madigan. She went straight into the Cabinet. Can all committee members expect that?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: I welcome the witnesses and thank them for all the work they do in Revenue and the Department. I am glad to have the opportunity to make a few points. I apologise if I am sometimes abrupt but that is the nature of the beast in here. The delivery can be a bit adversarial but it is not personal. I often think that when it comes to dealing with matters relating to Revenue and taxation we...

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: That is good. I often see these determined as 'the cost of double taxation to the State was €X millions'. When we use that language we must make it clearer for the taxpayer because in real terms it is not a cost to the State. It is not money we are paying out. For people's peace of mind it is important for them to understand that these people invested €X millions in research...

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: What is a CFC rule?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: Basically, it a different system to achieve the same outcome.

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: Is there a cost implication to changing to that system?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: So there could be a costs in terms of resources that will need to be applied in this regard.

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: The term "professionally sceptical" is a good term. Another term used is "transfer pricing". I note that the report also mentions changes to Ireland's domestic transfer pricing legislation. Can whomever is best placed to define "transfer pricing" do so?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: In the case of a company based in America that produces a product and sells it to its subsidiary in Ireland for X amount, which the subsidiary then sells on the open market for X plus 300% and therefore, all of the profits are with us, is our system robust enough on transfer pricing to protect against this?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: As things stand, could I as a pharmaceutical company produce a drug in, say, America, and sell it to my subsidiary in Ireland to put into boxes and then sell it from Ireland at X plus 300%? As things stand, is that legally possible?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: I refer to a scenario in which they are related. What is the position if the company in question is giving a sweet deal to a subsidiary in Ireland in the full knowledge that the market price is 300% more but it does that to get the benefit of the 12.5% headline rate, rather than the 39% headline rate in the US?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: I appreciate that the US tax code may or may not allow this. In the event that the US tax code did allow this, does our tax code facilitate it?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: The Chairman understands the point I am making. Notionally or in practice, could very limited value be added to a product here, perhaps through packaging, in order to domicile the profits here?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: Is what I am describing possible in practice? Are we looking to improve it?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: How am I doing for time?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: I need a bit of injury time. In terms of intellectual property, what was the tax yield from the knowledge development box in 2015 and 2016?

Public Accounts Committee: Comptroller and Auditor General 2016 Report
Chapter 20: Corporation Tax Receipts
(30 Nov 2017)

Marc MacSharry: Are there any companies who have moved their domicile off-shore from Ireland to a more favourable tax regime in another country? If that data is available, how many such companies are there?

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