Catherine Murphy (Kildare North, Social Democrats)
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284. To ask the Minister for Finance if, his Department will consider conducting a comprehensive spill over analysis of the possible effects of Ireland’s current tax system on developing countries. considering the issues raised in a submission by organisations (details supplied) to the UN Committee on the Rights of the Child and that the only spill over analysis of Ireland’s tax system on developing countries was conducted in 2015 and accounted for only 4% of available data on Irish overseas investment, [4797/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The Department previously carried commissioned an independent economic analysis into the possible effects of the Irish tax system on developing economies which was published in July 2015. The report considered Ireland’s tax system including out tax treaty network, and on foot of the report two tax treaties were renegotiated delivering more favourable terms for our treaty partners.   

This research has also fed into the formulation of Ireland's Treaty Policy Statement which was published in June 2022 following a public consultation process alongside bilateral engagements with a broad range of stakeholders including NGOs.

The treaty policy statement directly addresses policy for treaties with developing countries. The statement contains a commitment to not approach any least developing country, as defined by the UN, in relation to opening discussions on treaties and where Ireland is approached a commitment is made to carry out a spillover analysis to ensure that benefits are likely to accrue prior to agreeing to any such treaty. Where Ireland agrees to a treaty we will be cognisant of the source taxation rights of the developing countries.

While it is not currently intended to conduct further spill over analysis of this nature, Ireland does periodically carry out independent economic research relevant to this work and more recently research has been carried out and published into the outbound payments from Ireland both in 2021 and in 2022 which took stock of the impact of the recent rule changes on royalties, dividends, and interest.  Consideration on the need for additional tax measures to apply to outbound payments is ongoing and a public consultation has already taken place to inform that process.

The above actions should also be seen in the context of the ongoing reform which will deliver a substantially revised set of international tax rules.

The OECD's two pillared solution to address the challenges brought about by the digitalisation of the economy, which Ireland fully supports, will ensure the MNEs will pay a minimum rate of 15% tax in every country they operate.  Furthermore, it will also see a reallocation of taxing rights to market jurisdictions including in the developing world.  Earlier this month the OECD published an economic assessment which found that low and middle income countries will benefit the most from the implementation of these new rules.