Rose Conway Walsh (Sinn Fein) | Oireachtas source

I move recommendation No. 7:

In page 112, after line 42, to insert the following:

“Report on restoring cap on intangible assets29. The Minister shall, within 6 months of the passing of this Act, prepare and lay before both Houses of the Oireachtas a report on restoring the 80 per cent cap on intangible assets onshore between 2015 and 2017 that can be written off against profits at the rate of 100 per cent.”.

This relates to 80% cap on intangible assets that were onshored between 2015 and 2017. We want to stop it being written off against profits at the rate of 100%. I welcome that the conversation about multinational taxes is changing. I have always argued that if we are to protect Ireland's interest, we must get our own house in order first.

The Minister commissioned Mr. Seamus Coffey to review this. One of his recommendations was to end the 100% write-off for intangible assets. The Minister acted but, shamefully, left a large gap for the assets onshored. When his attention was brought to a policy allowing significantly profitable companies to write off tax, he closed the door but refused to tidy up the mess. Mr. Coffey's report made it clear that it does not amount to retrospective taxation. When he appeared before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach he said:

No, I do not believe it is retrospective taxation. It does not change the amount of capital allowances that are available. The total quantum of capital allowances remains the same. All that changes is the amount that can be claimed in future years. That is limited to 80% of the taxable income that is earned. It is not retrospective taxation.

Recommendation 18 of his report stated:

In order to ensure some smoothing of corporation tax revenues over time, it is recommended that the limitation on the quantum of relevant income against which capital allowances for intangible assets and any related interest expense may be deducted in a tax year be reduced to 80%

It did not state "from now on".The whole issue of tax and multinationals is complicated but sometimes there is a blatant favouritism that must be called out. How did we end up here? It seems nobody knows. The lifting to 100% of the cap by the former Minister for Finance, Deputy Noonan, exceeded the wildest dreams of the multinational sector. The senior tax policy adviser in the then Department of Jobs, Enterprise and Innovation said he did not think he was the type in that role to be clamping down on multinationals but he clearly saw this as dangerous and that was when the discussion was about 90%, not 100% which allows for a 0% tax rate. We have forgone €750 million this year. I appreciate it can be argued that this will eventually be paid but a bill delayed is a saving in real terms.

There are serious questions about why this was ever done and as to why the policy remains, allowing an effective 0% tax rate for billion dollar companies. Requests for records of the meetings with Apple prior to the Finance Bill 2015 are refused under the Freedom of Information Act. This decision was a great mistake and must be rectified or else we will be hundreds of millions of euro worse off.