Strong Irish role key in formation of rules on multinational tax affairs

Ireland must play “a strong role” in the formation of any new rules on how multinational companies manage their international tax affairs, the head of the US corporate representative body here has said.

Addressing guests at its annual Thanksgiving lunch in Dublin, yesterday, American Chamber of Commerce Ireland president Peter Keegan said that Ireland can “hold its national head high” regarding OECD concerns about abuses of existing rules.

“We have a transparent and well regarded taxation system in this country and we have no interest in offering a haven to sharp practitioners,” said Mr Keegan.

“New international rules may arise as a result of the BEPS [base erosion and profit shifting] debate, and Ireland must play a strong role in their formation — as it has done to date.”

On broader tax issues, Mr Keegan welcomed the Government’s decision not to increase income and other taxes as part of Budget 2014. He also welcomed the move not to alter Ireland’s corporate tax rate of 12.5%, saying it provides welcome certainty to investors.

“It is not easy to hold the line on our corporate rate in the face of increasing, if undeserved, international scrutiny,” Mr Keegan told the 430 guests at yesterday’s lunch. “But the line was held and our vital national interests were successfully defended.”

While welcoming Ireland’s pending formal exit from its bail-out agreement as “a major milestone” on the path to economic recovery, Mr Keegan warned that the country will remain under international scrutiny on its re-entry to the bond markets and will still have challenges to face in the domestic economy, such as the continuing public finance deficit and high levels of public debt.