Joe Costello (Dublin Central, Labour)
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Question 122: To ask the Minister for Finance if his attention has been drawn to the fact that a company (details supplied) is reported to have paid only 2.5% corporation tax here; if he will explain how that is possible; the number of foreign direct investment companies which have avoided paying the full standard 12.5% corporation tax; the loss of tax to the Exchequer as a result; his plans to deal with the matter; and if he will make a statement on the matter. [45123/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Recent media reports have suggested that some multinational companies pay Irish corporation tax at rates that are significantly lower than 12.5%. The reports concerned appear to have incorrectly attributed to Ireland profits that represent the return due to assets owned in other jurisdictions by associated companies resident in those foreign jurisdictions. Companies resident in Ireland pay 10% or 12.5% corporation tax on their profits arising here (the 10% rate for manufacturing profits expires for eligible companies at the end of this year). By relating this corporation tax to the profits of the Irish-resident companies and the profits of foreign-resident associated companies (which are not profits chargeable to Irish corporation tax), these reports can produce an average tax rate for the companies concerned that is lower than 12.5%.

While multinational groups, with subsidiaries in other countries as well as in Ireland, can achieve lower average rates of tax for the total profits of those Irish and foreign-resident subsidiaries taken together, nevertheless, the rate of tax actually paid on the profits of the Irish-resident subsidiaries will always be 12.5% (or, until the end of this year, 10%).