“Government’s inaction on tax avoidance damaging Ireland’s reputation” – Matt Carthy MEP
“Government’s inaction on tax avoidance damaging Ireland’s reputation”
– Matt Carthy MEP
European Parliament labels Ireland a Tax Haven!
Sinn Féin MEP Matt Carthy has said that the government’s inaction on tackling corporate tax avoidance is damaging Ireland international reputation. Carthy was speaking following the adoption of the TAX3 special committee’s final report in the European Parliament in Strasbourg today, Tuesday, which labelled Ireland, Cyprus, Luxembourg, Malta and the Netherlands as tax havens within the EU. The report “calls on the Commission to currently regard at least these five Member States as EU tax havens until substantial tax reforms are implemented”.
Speaking from Strasbourg, Carthy said: “It is a significant indictment of the government’s lack of meaningful action on corporate tax avoidance that the official position of the European Parliament is now that Ireland is a tax haven.
“Once again, international newspaper headlines will be characterising Ireland as a tax haven. This is doing serious damage to our reputation as a destination for investment, and it is causing anger among the leaders and the ordinary people of countries around the world who see us as siphoning off the funds that they want to see collected by their public revenue agencies.
“It is deeply unfair for the Irish people who pay their taxes only to see massive corporations who benefit from public expenditure on education and infrastructure to pay next to nothing to Revenue.
“Throughout the mandate of this TAX3 special committee, I have questioned Google’s representatives who confirmed to me that the company is continuing to use the Double Irish with Bermuda – shifting billions of its profits there where they go entirely untaxed.
“My group in the Parliament has also investigated Apple’s new tax arrangements following the state aid investigation, and found that with the help of the Irish government, Apple has created a new structure that has allowed it to gain a tax write-off against almost all of its non-US sales profits. This has allowed it to pay as little as one per cent tax on its profits in the EU.
“The reality is that despite government rhetoric on being serious about ending tax avoidance in Ireland, it continues to actively facilitate profit-shifting. Since 2015 there has also been a surge in corporations using intellectual property-related tax avoidance schemes. Tax advisors openly advertise that as a result of the capital allowance on intangibles introduced in 2015, 100% IP-related trading profits can be offset in an accounting period, meaning the effective tax rate paid on IP can be reduced to zero. Our tax regime also does not impose a withholding tax on royalties, with a couple of small exceptions.
“Last year the Public Accounts Committee published an important report on corporate tax in Ireland, finding that our over-reliance on a handful of tax receipts from multinationals poses an ‘unacceptable level of risk’ to our economy.
“The government’s approach of doing the bare minimum to combat tax avoidance is indeed posing an unacceptable risk to both our economy and to our reputation.”