Pearse Doherty (Donegal, Sinn Fein)
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106. To ask the Minister for Finance the status of the State's implementation of the anti-tax avoidance directive; the legislative or regulatory steps he plans to take to complete its implementation; and if he will make a statement on the matter. [34127/16]

Michael Noonan (Limerick City, Fine Gael)
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The Anti-Tax Avoidance Directive was agreed by Member States following ECOFIN on 17 June 2016. The Directive includes five significant corporate tax anti-avoidance measures. Three of the measures derive from the non-binding elements of the OECD BEPS process, with the remaining two measures coming from the European Commission's previous Common Consolidated Corporate Tax Base (CCCTB) Directive. 

With regard to the measures that are derived from the non-binding elements of the BEPS process, namely the controlled foreign company rules, the hybrid mismatch rules and the interest limitation rules, these measures must be implemented by Member States by 1 January 2019. However, the provisions on interest deductions (the interest limitation rule) may be deferred until 2024 for countries that already have strong targeted interest rules. 

The Directive also proposes that an exit tax must be applied when a company moves its residence, its assets or a branch out of a Member State. Ireland currently has an exit tax which will be reviewed to determine what changes may be needed to ensure it is in line with the Directive. The exit tax will need to be implemeneted by 1 January 2020. 

Finally, the Directive also proposes that Member States introduce a general anti-avoidance rule which disregards any non-genuine arrangements which are carried out by a company for the purpose of gaining a tax advantage.  Ireland in fact already has a similar General Anti-Avoidance Rule in our domestic tax law since the 1980s. The general anti-abuse rule in the Directive will need to be implemented by 1 January 2019. 

The measures in the Directive will be implemented by Ireland to meet the agreed deadlines.