Wednesday 21 February 2018

Enda Kenny: Ireland supports G8 proposals to stop companies shifting profits between countries

G8: Enda Kenny and Christine Lagarde at summit in Lough Erne
G8: Enda Kenny and Christine Lagarde at summit in Lough Erne

TAOISEACH Enda Kenny says Ireland will support proposals from G8 leaders that call on countries to change their rules to stop companies shifting their profits across borders.

However, Mr Kenny said any moves must be taken at the same time by all countries, and added there was no suggestion of harmonising tax rates.

He was speaking at the conclusion of the G8 summit in Co Fermanagh, which saw the leaders agree the ‘Lough Erne Declaration’, which says countries should change their rules that allow companies shift profits between countries.

This could shift the focus to countries like Ireland which have been criticised recently for their tax regimes, and how multinational companies use their tax systems.

The ten-point G8 agreement also says "tax authorities across the world should automatically share information to fight the scourge of tax evasion" - but not avoidance.

However, it does say national rules should be changed so companies cannot "shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where".

The agreement comes at the end of the G8 summit, which highlighted the fight against tax avoidance and evasion as one of its main themes. Mr Kenny said Ireland can "sign up" to the plan.

"The ten-point plan produced by the G8 dealing with transparency, dealing with tax, dealing with fraud and dealing with trade is something Ireland can sign up to," the Taoiseach said.

"The European Council at its last meeting concluded that no country on its own can deal with these issues unilaterally and therefore there is a need for an international movement an collaboration among the countries.

"Countries can only do this in unison and Ireland is very much in favour in having the international tax code, the international tax movement dealing with this. We want to be part of that."

He also said Ireland's corporation tax was brought up at the G8 meeting, but not at any of the fringe events he attended - but he later defended it to the other leaders.

"I know it was referred to in the G8 itself," Mr Kenny said."I was able to account for the Irish tax position but I strongly welcomed the ten-point plan and while we're not a member of the G8 this is part of the principle that Ireland has aggressively been pursuing during our presidency."

The Lough Erne declaration also says: "Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily.

"Developing countries should have the information and capacity to collect the taxes owed them – and other countries have a duty to help them."

The preamble to the declaration also says that while "private enterprise drives growth, reduces poverty and creates jobs" Governments have "a special responsibility to make proper rules and promote good governance".

"Fair taxes, increased transparency and open trade are vital drivers of this," it adds.

By Fiach Kelly in Enniskillen

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