Skip to main content

Christian Aid welcomes publication of Irish Corporation tax review

Christian Aid welcomes publication of Irish Corporation tax review as a small but important step in the direction of tax justice

12 September 2017 - Christian Aid today welcomed the publication of the review of Irish Corporation tax, calling it a small but important step in the direction of tax justice.
 
'The government deserves credit for conducting this review, and while it is short on elements that could be viewed as tax justice, as a first step in reforming Irish corporation tax regulation, this may ultimately prove to have been a valuable exercise,' said Sorley McCaughey, Head of Advocacy and Policy.  

The charity worked closely with Minister Zappone at the time of the Apple ruling and praised the review’s focus on Ireland’s intellectual property regime, which according to the charity, in recent years has become a spectacular source of tax avoidance for multinational companies.

'The review is right to highlight Ireland’s IP regime. Research that we will publish next month will show that changes made in 2014, providing greatly expanded tax breaks for intellectual property income, have seen an increase in capital allowances for intellectual property of almost 1,000% between 2014 and 2015, as companies moved to onshore their IP to places like Ireland,' McCaughey said.

'The Department of Finance estimated at the time that this would result in foregone Irish corporation tax of some €27million a year. However, our research shows that assuming the full tax benefit could be realised in one year, would result in potential foregone revenue of €3.3bn in 2015 alone.

'Reputationally this has the potential to be as damaging as the notorious Double Irish avoidance, which is to be phased out by 2021,' McCaughey said.

'Without making changes to the current IP regime, the government runs the risk of being accused of having replaced one major tax avoidance scheme, the Double Irish, with another.'