Pearse Doherty (Donegal, Sinn Fein)
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165. To ask the Minister for Finance the cost to date of the decision to allow some companies continue to use the double Irish until 2020; the number of companies using the scheme; the estimated net extra revenue if the close date was moved to 1 January 2019; and if he will make a statement on the matter. [50908/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Finance Act 2014 amended the company residence rules in section 23A to provide that an Irish incorporated company would be regarded as resident for tax purposes in the State. In essence, the change introduced by Finance Act 2014 was designed to ensure that a company could no longer use an Irish label of incorporation without also being tax resident here.

As my predecessor has clearly stated in the past, the ‘double Irish’ was not part of the Irish tax offering. It was just one example of the many international tax-planning arrangements which have been designed and developed by tax and legal advisers to take advantage of mismatches between the tax rules in two or more countries. In many cases these were designed to exploit gaps in US anti-avoidance rules. Therefore, action was taken by Ireland in Finance Act 2014 to amend our residency rules in the absence of US tax reform. The recent US tax reform sees that country asserting its global taxing rights and this should put an end to the type of arrangements some multinationals were previously able to use to avoid tax.

We are already seeing evidence of US companies recognising a tax charge and paying tax in the US in respect of historic profits as a result of US tax reform. I believe the changes introduced, combined with the widespread implementation of the BEPS recommendations, will have a major impact on the ability of multinationals to engage in aggressive tax planning.

The amendment in Finance Act 2014 was brought into effect for new companies incorporated after 1 January 2015. To ensure that this change did not negatively impact on other related group companies who have real and substantial operations in Ireland, a transition period until end 2020 was provided to give these groups a reasonable timeframe to plan and re-organise their business structures to take account of this change.

I am informed by Revenue that, as the so-called ‘double Irish’ structure is not part of the Irish tax code, Revenue does not have a register of companies incorporated but not tax-resident in Ireland that may be used in that structure. Statistics regarding such companies, which may include companies used in a ‘double Irish’ structure, are therefore not available. However I would again note that there is evidence that multi-lateral and US tax reform is proving successful in ensuring that profits in such companies are subject to tax.