Written answers

Wednesday, 20 April 2016

Department of Public Expenditure and Reform

Public Procurement Contracts

Photo of Finian McGrathFinian McGrath (Dublin Bay North, Independent)
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124. To ask the Minister for Public Expenditure and Reform his views on correspondence (details supplied) regarding Government contracts being given to companies that are registered in tax haven countries; and if he will make a statement on the matter. [7435/16]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Public procurement in Ireland is governed by International, EU and National Law and National Guidelines.  The EU Treaty principles of equal treatment and non-discrimination, transparency, mutual recognition, proportionality, free movement of goods and services and the right of establishment must be observed on all tenders.  The main purpose of the EU public procurement regime is to open up the market and to ensure the free movement of supplies, services and works within the EU having regard to Treaty of Rome principles including transparency, proportionality and equal treatment.  

Public procurement procedures require all applicants to meet certain standards when applying for public contracts. The criteria upon which contracting authorities may exclude applicants from the award procedure of public contracts are set out in Regulation 53 of SI 329 of 2006 European Communities (Award of Public Contracts) Regulations 2006 and Article 45 and Recitals (34) and (43) of 2004/18/EC, the EU Directive on the co-ordination of procedures for the award of public works contracts, public supply contracts and public service contracts.  A contracting authority is required to exclude from tendering any tenderers who to their knowledge have been convicted of specified offences, including corruption, fraud, money laundering, and participation in a criminal organisation.  The law also includes various permissible grounds for the exclusion of a tenderer from a procurement competition at the contracting authority's discretion, including bankruptcy/insolvency, grave professional misconduct, serious misrepresentation, and non-payment of tax or social security.   

In relation to tax compliance, it is a condition of award of all public contracts above €10,000 (inclusive of VAT) within any 12-month period that the successful applicant provides to a contracting authority either a current Tax Clearance Certificate or demonstrate a satisfactory level of subcontractor tax compliance in the case of the construction, forestry or meat processing sectors, who are subject to Relevant Contracts Tax (RCT).  The same tax clearance requirement applies to any non-resident contractor being awarded a public contract. 

Payments under a contract are at all times conditional on compliance with these requirements.  It is the responsibility of each contracting authority to ensure that tenderers comply with all the requirements of the process.

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