Paul Murphy (Dublin South West, Anti-Austerity Alliance)
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172. To ask the Minister for Finance his views on Ireland's tax treaties with developing countries; his further views on a Eurodad report (details supplied) which shows that Ireland's tax treaties have, on average of EU states, introduced the highest amount of reductions of developing country tax rates; his views on the impact this has on tax takes in developing countries; and if he will make a statement on the matter. [39892/16]

Michael Noonan (Limerick City, Fine Gael)
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Double Tax Treaties are agreements voluntarily entered into by countries to eliminate double taxation and to facilitate cross border investments. Countries typically agree in such treaties to allocate taxing rights in respect of activity carried out in one country by residents of the other country. This will be done to encourage trade and investment between the two countries. The exact allocation of taxing rights is a matter for negotiation between the Governments of the two countries concerned and a treaty will only be agreed if both countries are satisfied with the outcome.

As an OECD member country, Ireland's treaties are typically based on the OECD Model Treaty. However, in any of our treaties negotiated with developing countries, the final treaty contains a mix of OECD Model and UN Model Treaty provisions, which are considered favourable to developing countries. Both countries must be happy that a proposed treaty strikes an appropriate balance for it to be agreed.

Very positive efforts have been made by Ireland in recent years in the area of tax treaties and developing countries. The Department of Finance commissioned the IBFD to undertake a spillover analysis to look at the possible effects of the Irish tax system on Developing Economies. The Report was published on Budget Day in October 2015 and is available on the Department's website. Ireland is only the second country in the world to undertake such a spillover analysis and I have consistently called on all countries to undertake a similar analysis.

Some points of concern in relation to our treaties with Zambia and Pakistan were noted in the spillover analysis. Those treaties were two of Ireland's oldest double taxation agreements and were both already under re-negotiation when the study started. They have now been renegotiated and the new treaties were signed and ratified by Ireland in 2015.

I note the publication of the report 'Survival of the Richest' by a number of civil society organisations. The report also references a previous report by ActionAid which had included in its analysis those older tax treaties which have been replaced. It is unclear exactly which Irish tax treaties were included in the analysis in this new report and the inclusion, for example, of treaties which have been replaced would clearly distort any analysis. As the report has just been published, my Department intends to seek further information from the authors of the report providing further clarity on the analysis.