Rose Conway Walsh (Sinn Fein) | Oireachtas source

As currently drafted, the Finance Bill would only apply the cap provided for in this section to assets onshored from 11 October this year. This means that hundreds of billions of euro transferred here in recent years, especially in 2015, can still be used by companies to potentially neutralise their corporation tax bills. We believe this is totally unacceptable. In this regard, I welcome Seamus Coffey's recent comments recommending that the Government's new cap on the write-down of intangible assets apply to all assets, as opposed to the Government's proposal, which grandfathers the new measure, meaning the 80% cap will only apply to intangible assets acquired post-budget.

Due to the proposed cap not applying to all intangible assets, the State could be missing out on a huge amount of corporate tax revenue which may not materialise. Seamus Coffey notes that if the cap applied to all claims, existing and new, the additional corporation tax to be collected in 2018 could be up to €1 billion, using the 2015 figure published by Revenue and estimates from that time used by the Department of Finance, as opposed to the €150 million the Government expects to raise through the grandfathered measure.

We are paying for these onshored assets because they count towards the GNI, pushing up our EU contribution, so we are letting these companies pay no tax through their intangible asset write-downs and the State is picking up the tab regarding increased contributions to the EU budget due to the tax-free earnings many of these companies have from the intangible assets. The State is making payments of approximately €200 million per annum to the EU budget as a result of the gross income which makes no contribution to Ireland's national budget. Over the ten-year period, this would result in payments of around €2 billion. We are diverting money from potential spending programmes to pay for the associated EU budget contributions this untaxed income requires each year, with the increases in EU budget contributions counting towards our fiscal space.The Government needs to amend its proposal to include all intangible assets in order to safeguard our tax base and to ensure that this State is not unnecessarily picking up the tab for increased EU budget contributions related to tax-free multinational activities. I ask the Minister of State to reconsider the recommendation.