The recent spate of high-profile tax inversion deals involving Irish companies are being driven by push rather than pull factors, according to Minister for Finance Michael Noonan.
The deals which let companies avoid domestic taxes by reincorporating abroad has again put the spotlight on Ireland’s corporate tax regime.
Speaking at a conference on international taxation and economic growth in Dublin today, Mr Noonan said these tax inversion deals were the result of tax issues in other jurisdictions.
Nonetheless, he acknowledged they were giving rise to “negative perceptions” in terms of Ireland’s tax code.
On the Government’s decision to bite the bullet and get rid of the so-called “double Irish” loophole, Mr Noonan said the move was unlikely to bring “an end to international tax planning”.
“For that to happen, co-ordinated action by many countries working together will be required,” he said.
His comments come as Google plays down speculation that it is considering shutting its Bermudan arm and boosting its operations in Dublin, following the closure of the "Double Irish" tax mechanism.
“Ireland’s corporation tax strategy in a nut shell is to play fair but play to win,” Mr Noonan said.
"Let me be crystal clear, Ireland only wants foreign direct investment with real jobs and real substance."
To best position Ireland in the post-Beps environment, Mr Noonan has proposed the establishment of a patent box here to incentivise intellectual property-driven businesses setting up in Ireland.
However, Mr Noonan cautioned that it will be necessary to ensure his proposed “Knowledge Development Box” meets with the standards to be agreed both by the OECD and the EU.
Meanwhile Mr Noonan announced his department and the Economic and Social Research Institute (ESRI) would shortly embark on a new joint research programme on taxation and the economy.
Among the planned projects, the research programme will include a modelling component which will aid in the analysis of the impact of taxation changes on economic outcomes.
