Fresh approach to tax treaties essential for business, says Irish Taxation Institute

IRELAND needs to change its approach to tax treaties if it hopes to stay ahead the global marketplace. That was the message today from the Irish Taxation Institute (ITI) in its pre-Budget submission.

Called Tax Treaties in a Global Marketplace, ITI put forward four specific proposals to Government which would enhance Ireland’s attractiveness as a business destination for multinationals, it said.

Speaking after a meeting with the Minister for Finance, Brian Cowen, Dermot O’Brien, ITI President said: “If we are to remain competitive, attract investment and meet the needs of a highly skilled workforce, then a new approach to tax treaties is essential.”

Mr O’Brien said maintaining a broad tax treaty network was important, but there were other options.

“Tax treaties help in global trading, but each treaty involves two governments with often different priorities. This will never be a speedy solution to the challenges of a dynamic marketplace.

“While it is important to maintain the momentum on expanding our tax treaty network we can control matters more quickly through our own law and this is just one of the options we have put forward.”

ITI also said the 2004 report of the Enterprise Strategy Group, Ahead of the Curve — Ireland’s Place in the Global Economy said the next phase of Irish economic development must be to create the right structures and then market Ireland as a place to do business on a global rather than purely a European scale.

Mr O’Brien said: “Ten years ago, it was the tax rate that was critical to attract inward investment. Today, it’s about the overall tax package.”