The advice offered to the Government by tax advisers to major US multinational companies in Ireland is scarcely surprising. Tax Executives Institute (TEI), a Washington-based firm, has warned the Government against moving first – before other countries – and unilaterally changing the corporate tax regime while international agreement on reform is under discussion.

In a globalised world, multinational companies aim to pay as little tax as possible for as long as possible, wherever they operate. Increasingly aggressive tax planning by multinationals has deprived some countries – notably the US – of substantial tax revenues.

In response, political pressure from America, and from other countries, for a major reform of the international tax system has prompted a review. And throughout the controversy, Ireland’s corporate tax laws have become the focus of close critical scrutiny, and increasingly adverse comment.

Aggressive tax planning involves legal tax avoidance rather than illegal tax evasion, and some multinational companies with substantial Irish investments – notably Apple and Google – have used it to minimise their tax bill. Last year Ireland was accused at a US Senate hearing of being a tax haven, following Apple's revelation that it had paid a mere 2 per cent tax on its foreign earnings in 2012. The Government has rejected this description – as has the Organisation for Economic Co-Operation and Development (OECD) – but it has been stung by the charge, and forced to change.

US companies that have located in Ireland are clearly worried that the Government, on its own initiative, may alter the corporate tax rules. This would adversely affect the after-tax return secured on their investments, and place those companies at a competitive disadvantage. Tax advisers are seeking to protect and advance the special interests of their clients.

The Government, however, has a broader remit, and is concerned to protect a wider national interest. It is both defending the 12.5 per cent rate of corporate tax while accepting the need for reform of the international tax system. For the Government taking unilateral action while those discussions continue might well weaken rather than strengthen the State’s negotiating position, given that it is one of many countries with competing interests on this issue.

Ireland was an early pioneer in offering a low tax environment to attract foreign direct investment, and since the late 1950s it has enjoyed remarkable success. That investment has provided the foundation for the modern Irish economy, and a strong multi-national sector has helped to offset weakness in the domestic economy during the recession. Foreign direct investment may not be just about tax but – as the record shows – it does have a major bearing on whether companies choose to locate here.