Ireland is one of the world’s worst corporate tax havens according to new research by Oxfam.
It puts Ireland sixth in a list of 15 countries helping big business to cheat countries and their citizens out of billions of euro in tax every year.
“Ireland is part of a toxic global tax system servicing the very wealthiest while ordinary people pay the price and lose out on essential public services,” said Jim Clarken, CEO of Oxfam Ireland.
“Around the world we are known as a country of good fun, bad weather and awful tax policies that facilitate worsening inequality by allowing some of the world’s richest companies to avoid paying their fair share to society. This is no badge of honour.”
Bermuda tops the list of 15 countries followed by the Cayman Islands and the Netherlands.
Switzerland and Singapore are in fourth and fifth place followed by Ireland. Luxembourg is in seventh place, Curaçao is eighth and Hong Kong ninth. The countries ranked from 10th to 15th are Cyprus, the Bahamas, Jersey, Barbados, Mauritius and the British Virgin Islands.
The publication of Oxfam’s new ‘Tax Battles’ report coincides with the first day of the Lux Leaks whistle-blowers’ appeal trial in Luxembourg [Monday 12 December]. Whistle-blower Antoine Deltour and his co-defendants exposed tax deals negotiated by Luxembourg tax authorities that enabled multinational companies to dodge millions of dollars in taxes.
The countries earned their place on Oxfam’s list because they have adopted an aggressive set of tax policies to minimise the tax bills of large multinationals.
Ireland’s score was based on its lack of effective rules to prevent corporate tax dodging and because it facilitates large-scale corporate tax avoidance through profit-shifting, aggressive tax planning structures and so-called sweetheart deals like the tax arrangements enjoyed by Apple that enabled the global tech giant to pay a 0.005 percent corporate tax rate.
“Not only do we turn a blind eye, we put out the red carpet for those companies that get away with large-scale tax avoidance through profit-shifting and sweetheart deals,” said Mr Clarken.
“From a national, European and international perspective, the game is up. Citizens everywhere have had enough. We need to get serious about making companies pay the tax that’s due and we need transparency about where and how profits are made and where and how they are taxed. We collect more detailed data about farm animals in this country than we do about the tax affairs of multinationals.
“Ireland claims to be committed to dealing with tax rules at the EU level but seems to be paying lip service to this idea while actually blocking potential reform. Where is the political will to really address the problem?”
This is not about Ireland’s corporate tax rate but the wider aspects of our corporate tax system, Oxfam said. “Ireland has been involved in harmful tax competition in terms of loopholes and tax deals for many years, e.g. allowing Apple to pay just 0.005% at one point. Ireland is like the friend who tries too hard. We already have a lot to offer multinationals without underselling ourselves by letting companies pay less than their fair share.”
Changing tax rules to make them fair shouldn’t affect Ireland adversely but would instead enhance our international reputation, said Mr Clarken. “The burden on individual tax payers and citizens would be lessened with more money in the bank to spend on health and education. Ireland also needs to take a real leadership role in international tax reform instead of being a blocker.
“Ireland should take immediate action to curb corporate tax havens and their role in harmful tax competition by agreeing international tax haven criteria and a clear public list of where the tax havens are. Strong measures including sanctions should be adopted to limit profit shifting.”
It is absolutely critical that the world establishes a clear list of which are the worst tax havens, based on objective criteria, and free from political interference. This could be done by the UN or another independent body on an annual basis, said Mr Clarken.
Tax dodging by multinational corporations costs poor countries at least $100 billion (approx. €92bn) every year. This is enough money to provide an education for the 124 million children who aren’t in school and fund healthcare interventions that could prevent the deaths of at least six million children every year.
Mr Clarken added: “Governments are falling over themselves to ensure corporations pay as little tax as they wish – and starving their countries of the money needed to education, healthcare and job creation in the process. They must ensure companies pay a fair amount of corporation tax, otherwise their citizens will continue to pay the price.”