Taoiseach insists no country can act unilaterally on tax
Kenny reminds G8 leaders that Irish corporate tax rate is statute-based
Taoiseach Enda Kenny and International Monetary Fund managing director Christine Lagarde after a G8 summit group photograph at Lough Erne, Enniskillen, yesterday. Photograph: Reuters/Andrew Winning
Taoiseach Enda Kenny said he took the opportunity at a working lunch with the G8 leaders to account for Ireland’s position on corporate taxation.
He also said the summit had been a great success, and he praised the work of British premier David Cameron for bringing it to Fermanagh.
Saying the Government would work with global powers following the G8 move to seek an overhaul of international business tax, Mr Kenny said he had no problem with the recommendations set out by the leaders in Fermanagh.
He emphasised, however, that no single country could act unilaterally in this regard.
“The European Council at its last meeting concluded that no country on its own can deal with these issues unilaterally, and that therefore there is a need for an international movement and collaboration among the countries to actually deal with this.”
He reminded the G8 leaders that the Irish corporate tax rate was statute-based.
“I was aware that the matter had been referred to in the context of Ireland’s corporation tax rate now, which quite a number of leaders were very clear to say that just because a tax rate is pitched at a particular level doesn’t mean anything other than that.”
He continued: “I made perfectly clear that there wasn’t a movement here for tax harmonisation or for dealing with the issue of the rates. Ireland’s tax rate is perfectly legal and we have made that point on so many occasions.
“It is the international environment and jurisdictions in which multinationals work that eventually leads to the amount of tax that is actually paid, and as I said the base erosion and profit-shifting report from the OECD will be produced now in the next couple of weeks, and Ireland has been a particular participant in that.”
He dismissed any suggestion that Ireland’s relationship with multinationals was at odds with the spirit of the Lough Erne Declaration by the G8 leaders.
He said the Government would participate in the work following the summit “and the consideration of what is the best thing to do here to deal with tax evasion, with tax fraud and with transparency”.
Ireland had set out many years ago to be an attractive location from a foreign investment point of view.
“We can only tax companies in the country on the profits generated in the country. It is because the international jurisdictions in which multinationals operate that the end result is often acquainted with the country of origin when in fact that’s not true.
“For instance, companies that have been mentioned in the past have very substantial numbers employed in Ireland, so the point is that the European Council itself recognises that you cannot do this unilaterally; it requires collaboration and co-operation from the countries in general.”