Noonan fears reputational damage over 'Double Irish' tax avoidance
Published 18/01/2013 | 05:00
FINANCE Minister Michael Noonan warned that Ireland risks getting a bad name thanks to reports of Irish-based multi-nationals using tax avoidance schemes.
He told the Dail yesterday that the country was not a "tax haven" and multinationals here were paying the full 12.5pc corporate tax rate on their profits.
He admitted he was worried about media reports on the 'Double Irish' technique, which allows multinational companies to pay tiny tax bills by routing profits through Ireland and the Netherlands.
"The problem with the so-called 'Double Irish' from Ireland's point of view is that it has that name. People think that something we do here gives rise to it. That is not the case," he said.
Mr Noonan blamed tax codes elsewhere and the way the US government treats certain arrangements.
The minister was speaking as the cost of borrowing short-term debt on the international markets fell again. The cost has now dropped almost 90pc since July.
T Bill sale
The National Treasury Management Agency (NTMA) raised €500m with three-month debt known as 'T Bills' at an interest rate of just 0.2pc yesterday.
That's a staggering 89pc lower than the 1.8pc interest investors charged last July. It is also less than half the rate investors got at the last auction in November.
Lending to governments over very short periods is regarded as a very low-risk investment. The yield paid back in July was high by historic standards because it was the first step back into the markets for Ireland after the 2010 bailout.
The sharp drop in borrowing costs is the latest sign that investor attitudes are normalising. The latest debt deal follows last week's successful auction of €2.5bn of longer term five-year bonds. International investors offered to lend €1.8bn to the State at yesterday's bill auction, but most of the cash was left on the table because it was not required.
The next big challenge for the NTMA is convincing investors to buy 10-year Irish bonds, long-term debt is a big test of confidence.