Denis Naughten (Longford-Roscommon, Fine Gael)
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Question 949: To ask the Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 670 of 28 September 2005, the grant aid which has been returned to his Department; the discussions his Department has had with the company concerned regarding alternative employment on the site; and if he will make a statement on the matter. [28738/06]

Denis Naughten (Longford-Roscommon, Fine Gael)
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Question 959: To ask the Minister for Enterprise, Trade and Employment further to Parliamentary Question No. 293 of 20 June 2006, the progress of the negotiations in relation to the recovery of grant aid paid to a company; and if he will make a statement on the matter. [29452/06]

Micheál Martin (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 949 and 959 together.

The company has not returned any grant aid to Enterprise Ireland. Discussions between Enterprise Ireland and the company concerning grant aid to the plant at Rooskey, Co. Roscommon are still continuing. Progress is being made on the negotiations and it is expected that a conclusion will be reached which will take account of a very significant investment which is being undertaken by the company in its Pork Division in Ireland.

With regard to alternative employment on the Rooskey site itself, Enterprise Ireland is trying to stimulate further investment there. However, discussions are at an early stage in terms of future investment and have yet to be fully developed.

Ruairi Quinn (Dublin South East, Labour)
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Question 950: To ask the Minister for Enterprise, Trade and Employment if his attention has been drawn to the decision of the European Court of Justice on 12 September 2006 (details supplied) with regard to a taxation case involving a European multinational corporation; if he has requested the IDA and other agencies to indicate to him the implications for Ireland in relation to its continued programme of attracting foreign direct investment; if the consequences of the decision have a negative impact on Government policy; if so, the steps he proposes to take to redress the balance following the decision of the European Court; and if he will make a statement on the matter. [28989/06]

Micheál Martin (Cork South Central, Fianna Fail)
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I am aware of the ECJ ruling that the Deputy has referred to. The September 12 decision from the ECJ confirms the earlier Opinion issued by the Court that the UK Controlled Foreign Companies (CFC) rules restrict the freedom of establishment principle and are only justified to the extent that they are applied to counter "wholly artificial arrangements". Taxation is of course the responsibility of my colleague Mr. Brian Cowen TD, Minister for Finance, and I understand that officials in his Department are examining the longer-term implications of the judgement.

The business structures that multinational companies use to serve their markets from Ireland are legitimate and legal under European law. Therefore in order to avail of our 12.5% Corporate Tax rate the taxpaying company must be trading and have real economic substance in Ireland. The rate cannot be availed of by "brass plate" type operations, which are targeted by CFC legislation. From an IDA perspective the decision has two positives: it clearly finds that the establishment of a subsidiary, in part, for tax reasons does not constitute an abuse of freedom of establishment; and it will discourage wholly artificial arrangements while encouraging locating economic value in Ireland. IDA is only interested in attracting genuine economic activity to Ireland and therefore the ECJ decision is fully consistent with our existing policy.