David Cullinane (Sinn Fein) | Oireachtas source

I move recommendation No. 8:

In page 96, between lines 4 and 5, to insert the following:

“69. The Minister shall, within nine months from the passing of this Act, prepare and lay before Dáil Éireann a report on the possibility of establishing a sovereign wealth fund financed by non-cyclical Corporation Tax payments and taxes returned following rulings by the ECJ.”.

This amendment is all the more relevant given the spike in corporation tax returns we have seen this year, some of which is still unexplained or somewhat unexplained. The Minister has said he believes the spike in the returns is sustainable. We will see if that is the case.

We are trying to provoke a discussion on this issue as it has been suggested to me and many others that setting up this type of fund might be the safest way to lock in any windfalls or temporary bonuses from the State which we might enjoy because of the fluid situation in global taxation. We also know that multinationals are rational actors which will arrange their business in a way which benefits them most. That is fair enough. Despite what some might think, sentiment is not a major player in their tax affairs. We know that as rules change, they will change. They will try to stay one step ahead of all of us and of states. There is also a strong opinion, which looks increasingly credible, that the BEPS process is benefitting Ireland. That is ironic given our head in the sand attitude to corporation tax.

Sinn Féin and Deputy Pearse Doherty have been raising this issue of whether corporations were even paying an effective corporation tax or pay enough corporation tax. As a result of the European inquiries into Apple and much controversy and discussion about whether multinationals were paying their fair share of corporation tax, it would seem to some that there is some link to what has happened this year in terms of the spike in corporation tax.

The idea in the amendment is to examine the benefits of setting up a wealth fund which would be funded by these receipts as well as any repayments due to the State if, for example, the judgment in the Apple case was to lead to a windfall payment.This idea has some merit in that it attempts to make sure any windfall or temporary benefit which the State might enjoy would not be squandered. The fiscal compact and various other EU rules mean that if the State takes in extra income of that scale, it will not impact massively on the fiscal space because of the debt-to-GDP ratio rules and so on. However, there is merit in the approach suggested and at least examining the possibility of it happening, as proposed in the amendment.