It is believed that the OECD report on taxation, which will have huge implications for Ireland, will be released next week, a week earlier than expected.
Speaking at a conference in Dublin last month, the head of the OECD Centre for Tax Policy, Paschal Saint-Amans, said that the report would come out the week beginning Jul 15.
The report into base erosion& and profit sharing is aimed at clamping down on tax practices that cost OECD countries potentially trillions of euro in lost tax revenues.
Aggressive tax avoidance schemes came under the spotlight recently following testimony by Apple executives before the US Senate. Ireland came in for a huge amount of criticism during these hearings.
The problem is that tax policy is still determined at national level. However, multinationals operate across many jurisdictions. The emergence of e-commerce and the digital economy has added to the complexity of international taxation.
Unlike previous attempts to reach agreement on international tax rules, this report looks as if it will produce results, says Joe Bollard, a partner at the international tax services division at Ernst & Young. “This feels different. There is a much greater momentum behind this report.”
It is believed that all OECD countries share a broad consensus in how to deal with three of the key proposals in the report, which are transparency, hybrid tax structures and the treatment of tax havens.
Transparency is the agreement between different jurisdictions to share information relating to the tax affairs of corporates.
However, it is believed there is yet no consensus on how to deal what is known as “double no taxation”.
This is the type of tax avoidance that came in for criticism by US Senators John McCain and Carl Levin. Companies, such as Apple and Google, can route billions of profits made from their intellectual property, through zero tax rate jurisdictions, such as Bermuda.
The report will provide a roadmap on when the new regulations may be in place. It is thought for issues where there is a broad consensus, these regulations will be published in roughly 18 months, but it will take 24 months for areas where there is no consensus.
Mr Bollard says Ireland has nothing to fear from measures that will target tax havens. Moreover, the OECD report will not impinge on tax sovereignty and the ability to set rates.
© Irish Examiner Ltd. All rights reserved
More in this section