Our tax allure 'not a given', Dail committee told
Published 18/06/2014 | 02:30
IRELAND'S attractiveness as a tax base for companies is not set in stone, a Dail committee has been told.
Multinationals could pull out because of the OECD's proposals to revamp the global corporation tax regime, a Trinity academic has suggested.
Professor James Stewart, who last hit headlines when he claimed US multinationals here paid as little as 2.2pc corporation tax, said the base erosion and profit shifting (BEPS) project from the OECD may force big corporations that have based their Europe, Middle East and Africa (EMEA) hubs here to pull out.
"One of the changes that BEPS could make would be that sales and profits arose where the cash was generated," Prof Stewart told TDs yesterday.
"In the case of internet-based companies, that's not in Ireland. "If you're making profits in another location, then it would make sense to move costs to that location.
"I think that, particularly in the digital age, the EMEA type structure, they're vulnerable to relocating their activities depending on what might come out of BEPS."
Prof Stewart made headlines in February when he challenged the Government's assumption that effective corporation tax rates in Ireland were just under 12.5pc.
Addressing the Oireachtas Sub-Committee on Global Taxation, Prof Stewart said Ireland was not a tax haven, but had features of one. He said tax havens were not illegal, but had a relatively favourable tax regime given to the commercial sector.
"Ireland has some of these features," he said – but, he said, certain other countries had even more of these features.
Cora O'Brien of the Irish Tax Institute said that if BEPS meant changes for everybody, Ireland was a good place to be.
But she said it was "far from clear" what was going to happen at the end of BEPS.