US Senate ‘misunderstood’ Irish tax regime, says Noonan

Minister for Finance Michael Noonan says that Ireland must defend its corporate tax rate to defend jobs.

Speaking before the Oireachtas Finance Committee, he said there was a great deal of misunderstanding about our tax regime because of the US Senate hearings intoApple.

“I don’t want to be the whipping boy for some misunderstanding in a hearing in the US Congress.”

Mr Noonan urged members of the Oireachtas committee not to join in the chorus of condemnation on Ireland’s tax rate. Rather they should defend the system.

The reason why taxation is comparatively low is that, “we can’t tax their profits worldwide”.

He cited an editorial in the Wall Street Journal, which said that Apple’s tax affairs in Ireland, “isn’t alchemy, it is accountancy”.

Ireland is at the forefront of EU-wide attempts to combat tax evasion and tax fraud, according to the Minister Noonan.

“Combating tax fraud and evasion has also been a priority during our presidency of the EU and work has been taken forward in a number of key areas,” he told an Oireachtas committee yesterday.

He said that following a very productive discussion on the issue at the informal ECOFIN meeting in April, “Commissioner Semeta and I issued a joint letter to ECOFIN ministers inviting them to agree a range of measures to tackle tax fraud and evasion”.

Significant progress was made at the ECOFIN meeting on May 14 at which agreement was reached on a mandate for negotiating amendments to the savings tax agreements with Switzerland, Liechtenstein, Monaco, Andorra and San Marino to ensure equivalence of measures with the EU.

Also at the meeting ministers adopted council conclusions strongly welcoming the European Commission’s action plan on tackling tax fraud, evasion and aggressive tax planning, and reaffirming their commitment to collective action in this area working in close cooperation with the OECD and the G20.

Mr Noonan said tax fraud and evasion would be raised at an ECOFIN meeting in June.

“Ireland is also committed to working closely with other countries to combat offshore tax evasion. Sixty-nine bilateral double taxation agreements and 21 tax information exchange agreements are in place which ensure a system of full exchange of tax information.”

In 2012, Ireland became one of the first countries to sign an agreement with the US to improve international tax compliance and to implement the United States Foreign Account Tax Compliance Act.