LEGISLATION IS jeopardising the low corporate tax rate and foreign investment while aiding the taking of billions of euro of tax from poorer countries, according to a report published yesterday.
Written by Dr Sheila Killian of the University of Limerick on behalf of six leading global development organisations, the report states that some multinational corporations are diverting profits to Ireland to avoid higher taxes abroad.
“A very small minority of companies engaged in this are giving us a bad name,” said Dr Killian at the launch of the report in Dublin.
This perception of Ireland as a tax haven, she said, would make attracting multinationals that are conscious of their global image increasingly difficult while threatening our 12.5 per cent corporate tax rate.
Dr Killian also said Ireland’s unusually low base corporate tax rate created an obligation to act.
“If we are taking a lead on tax rates, we certainly need to take a lead on tax transparency.”
The report, Driving the Getaway Car? Ireland, Tax and Development, claims that some companies, often with very little presence in Ireland in terms of employment or manufacturing, are sold goods and services by foreign sections of the parent multinational for artificially low prices. By then selling from Ireland, these multinationals move the jurisdiction in which the profit is calculated and avoid higher tax rates in the country of origin, the report says. The report can be read at debtireland.org.