Pearse Doherty (Donegal, Sinn Fein)
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132. To ask the Minister for Finance the estimated budgetary impact of the corporation tax roadmap; the breakdown of same in the circumstances applicable; and if he will make a statement on the matter. [37165/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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On 5 September, I published Ireland’s Corporation Tax Roadmap, available on my Department’s website via the following link:. This roadmap takes stock of the changing international tax environment, outlines the actions Ireland has taken to date and the further actions that will be taken over the coming years to ensure that our corporation tax code is line with international best practices.

This roadmap also includes details in relation to the transposition of the Anti-Tax Avoidance Directives, ATADs, and actions to be taken with regard to the recommendations from the Review of Ireland’s Corporation Tax Code, undertaken by Mr Seamus Coffey. The commitments outlined in the roadmap are primarily about introducing measures to limit aggressive tax planning. To that extent, the commitments are not expected to have any cost to the Exchequer.

The Budget 2019 commitments set out in the roadmap include legislation to be introduced in Finance Bill 2018 to introduce controlled foreign company, CFC, rules, with effect from 1 January 2019. The purpose of CFC rules is to discourage the artificial diversion of income to low tax jurisdictions. As such they are not designed primarily to raise Exchequer revenue, but rather to modify taxpayer behaviour.

The final legislative steps required to allow Ireland to complete the ratification of the BEPS multilateral instrument will also be taken in Finance Bill 2018. The changes introduced to the application of Ireland’s tax treaties are primarily anti-avoidance in nature and are aimed at stopping international tax planning strategies known as treaty shopping. It is not possible to estimate the potential budgetary impact from the changes that will be made to the application of Ireland’s tax treaties.

The roadmap also enumerates further commitments to action over the next 12 to 24 months arising from the ATADs and from the Coffey recommendations, including the introduction of anti-hybrid and anti-reverse hybrid rules; an exit tax; an interest limitation ratio; updating of transfer pricing rules; and further work on mandatory disclosure rules, dispute resolution and implementation of the International Mutual Assistance Bill.

It will not be possible to estimate the budgetary impact of such measures until the process of designing the measures is significantly further advanced. As I outlined in the roadmap, the confluence of the OECD BEPS outcomes and the most significant US tax reform in recent history is likely to lead to significant changes in the structure of multinationals over the next number of years. The purpose of the programme of changes set out in the Roadmap is to ensure that Ireland remains on a sustainable path for growth and investment in this rapidly-changing international tax environment.