Kenny: Digital sector may need new tax plan
Attending an EU summit to discuss tax fraud and energy, he said he would read the Oxfam report that claimed Irish financial institutions may be shielding up to €707bn from tax authorities around the world, adding that, “if there is anything of interest to us, we will follow it through”.
EU leaders did not ask him about the US Senate reports that said Apple used Irish tax loopholes to pay an effective tax rate of less than 2% on profits over the past decade.
However, German chancellor Angela Merkel, while refusing to be drawn on the Irish issue, said that the EU has to make progress on companies paying their tax where they make their profit.
This has long been a bone of contention with Ireland over German companies becoming ineligible to pay amounts of tax through using their Irish-based entities.
There was something of a breakthrough also on bank secrecy where after a decade Luxembourg and Austria agreed to come on board on the Savings Tax Directive under which countries exchange full information on bank accounts belonging to EU residents.
While Luxembourg has said it will be 2015 before it comes into effect and Austria did not put a date on it, their agreement allows the EU to update agreements with Switzerland, Liechtenstein, Monaco, Andorra and San Marino under which all information will be remitted to the relevant tax authorities. It will effectively mean the end of bank secrecy.
The directive requires banks and other financial institutions to establish whether the holder of an account and investment funds is an EU resident and for companies and trusts to automatically transmit information about their beneficial owners.
The Taoiseach repeated that Ireland was not a tax haven under the OECD criteria, but “clearly the digital economy has moved on in such a way that international tax rules have not kept up”.
This was why the sharing of information and the bringing together of a new international standard in taxation was the focus of the European Council and the OECD and Ireland was supportive of this.
He disagreed with the comments made in the US Senate regarding Ireland and Apple, and repeated that Ireland did not do special deals or side deals with companies.
Chancellor Merkel, asked about Apple using Ireland to avoid paying US taxes, said that harmonising tax legislation was a long-term objective and was not the issue they addressed at the summit.
