OECD tax investigation will fail, says 75% of firms

More than three-quarters of businesses across the world think the OECD’s investigation into tax avoidance will be a failure.

The OECD’s Base Erosion and Profit Shifting (Beps) project is aimed at tackling tax avoidance by large multinationals who use complicated tax arrangement such as the ‘Double-Irish’ to avoid paying huge sums to governments around the globe.

Less than a quarter of 2,500 companies in 34 countries surveyed by taxation specialists Grant Thornton believe the investigation will yield positive results.

Grant Thornton tax partner Peter Vale said, however, the removal of the ‘Double Irish’ announced as part of October’s budget could be seen as an early victory for the organisation but warned that a huge task lies ahead of the OECD.

“Getting consensus on specific actions to tackle tax avoidance across so many countries is going to be difficult as different countries have different priorities and agendas,” Mr Vale said.

Mr Vale also highlighted the added significance Ireland’s 12.5% corporation tax rate could have should tax innovations such as the knowledge box — set to be introduced here — fall foul of OECD or EU regulations.

The transparency of the 12.5% rate could prove particularly attractive should such changes be introduced.

The OECD’s Action Plan on Beps was published in July 2013, following member state input, with a view to addressing perceived flaws in international tax rules.

Earlier this month, Finance Minister Michael Noonan warned reforms to the global tax system must not unfairly benefit larger countries. While lending his support to the investigation, he warned against the OECD singling US multinationals out for particular attention.