Government ministers insisted today that Ireland had nothing to fear from OECD proposals to clampdown on multinational tax avoidance.
Ireland has been at the centre of the storm over multinational tax because of the aggressive tax strategies deployed here by companies like Apple and Google.
Minister for Finance Michael Noonan said Ireland has been actively involved in all aspects of discussions on the OECD proposals.
He also said the Government agreed with the OECD’s conclusion that the digital economy could not be separated from other sectors for tax purposes.
“ Ireland in particular agrees with the conclusion of the report on the digital economy that this sector should not be ring-fenced from the economy as a whole,” he said.
Minister for Jobs, Enterprise and Innovation Richard Bruton said the new proposals, heralded by many as the beginning of a new era in international tax regulation, provided an opportunity for Ireland.
“ Ireland is fully engaged with this process. We can gain from the opportunities that will arise from this.”
“I think our tax base will grow as businesses move away from tax havens,” he added.
Last year at a US Senate sub-committee hearing Ireland was singled out for tax arrangements which attract multinationals with senators John McCain and Carl Levin claiming Ireland was a tax haven after it emerged Apple paid taxes of 2 per cent on its foreign earnings in 2012.
The Government is examining the possibility of changing certain contentious aspects of the State’s tax code, like the so-called “Double Irish” scheme, in the upcoming budget.
Pascal Saint-Amans, the chief architect of OECD’s tax proposals, urged Ireland to move sooner rather than later in closing off loopholes associated with its corporate code.
However, Tánaiste Joan Burton indicated the Government would not make any changes to the corporate tax regime until the end of next year at the earliest.
While Ms Burton said the Government is fully supportive of the OECD efforts to create a single set of international rules to ensure large companies pay their fair share of tax, she indicated the Coalition would wait for the OECD to finish its studies before making any changes.
Speaking at the conclusion of the Labour Party think-in in Wexford, Ms Burton said she did not expect that to happen until the end of 2015.
“The Government is fully supportive of the OECD process,” she said. “That is not going to conclude until sometime, I think, until the end of next year. We’re fully supportive. We’ve already made some changes in the context of the Finance Bill this year.
“None of the budgetary issues or Finance Bill issues at this stage have been decided but I would anticipate that we will work with the OECD in the context of them completing their work on the study, which would expect towards the end of 2015.”
Sinn Féin finance spokesman Pearse Doherty said Ireland has nothing to fear from OECD moves on tax transparency and should fully engage in the process.
“The world is moving towards a more transparent global tax environment and Ireland should not be seen in any way to be reluctant passengers in that journey and rather should be an agent for delivering tax transparency,” he said.
Padraig Cronin, head of tax and legal services at professional services group Deloitte, said: “There is no need for Ireland to take unilateral action as a result of the papers issued by the OECD.”
“ The areas of interest from an Irish point of view remain under discussion and will not be finalised until September 2015 at the earliest. We need to remain vigilant and ensure we remain competitive as this process continues to evolve,” he said.
“As multinational groups operating in Ireland employ large numbers here, such groups will be incentivised to increase their activities in Ireland, thus lending support to their existing tax structure,” he said.
KPMG tax partner Anna Scally said: “Today’s milestone in the BEPS project presents a strong foundation for Ireland to shape its low tax environment into the future.”
“The next 15 months will see political consensus on the parameters for international tax regimes. Ireland’s Government has stated its policy commitment to remain competitive.”