State to dispute ‘tax haven’ claim in letter to US senate committee

The Government is planning to write to a US senate committee in Washington disputing the claim made last week that Ireland is a tax haven.

It has not been decided as yet the extent to which the letter will address claims that the Government did a special tax deal with Apple some years ago in an effort to get it to locate activities here.

Last Tuesday, the chairman of the US senate subcommittee on permanent investigations, Democrat Carl Levin, repeatedly described Ireland as a "tax haven" and said Apple had "quietly negotiated with the Irish government an income tax rate of less than 2 per cent". Both claims have been rejected by Taoiseach Enda Kenny, by other members of the Government and by the IDA.

On Thursday senior figures from the Departments of Finance and Foreign Affairs, the IDA and the Irish Embassy in Washington held a video conference to discuss the damage done to Ireland’s reputation arising from the coverage the claims received in the US, and how Ireland might best go about countering the charges.

It was agreed there was a need to aggressively assert the facts surrounding Ireland’s tax position and counter the claim that it was a tax haven or that it did special tax deals.

Media interviews by senior politicians and Irish officials as well as contacts in Washington by embassy staff will be used to counter Mr Levin’s claims.

A letter aimed at putting Ireland's position on the record of the US senate committee is likely to be sent by Ireland's ambassador to the US, Michael Collins, with the text being drafted by the Department of Finance.

The chief executive of the IDA, Barry O’Leary, said he did not believe Ireland would change its tax policies in advance of any global agreement on a new regime. He told RTÉ he believed there would be changes, but that it would be “very, very wrong” for Ireland to act unilaterally. It could be the case that changes to international rules would benefit Ireland and put pressure on places such as Bermuda.

Tánaiste Eamon Gilmore said the way tax planning was carried out between jurisdictions had to be addressed at an international level.

Fianna Fáil finance spokesman Michael McGrath said the Government faced a challenge to repair the reputational damage done to the State.