Sinn Féin MEP Matt Carthy has commented on the report on profit-shifting published by academics from UC Berkley and the University of Copenhagen, including respected economist Gabriel Zucman.
Speaking from Strasbourg, Carthy, a member of the European Parliament’s special committee on tax evasion, tax avoidance and money-laundering (TAX3), said: “The paper finds that the Irish state is the top destination in the world for multinationals to shift their profit to. Profits of €90 billion were shifted to the Irish state in 2015, a sum greater than that being shifted to all the Caribbean islands combined.
“The report measures the extent of profit-shifting to avoid paying tax by multinationals around the world, and finds that for every $1 spent on wages in this state, $8 of profit is declared here – which is 16 the times the average of jurisdictions where profits are not routinely shifted to.
“It is not enough for the government to reject the findings of this paper as simplistic. Yes, wages are not the only measure of a company’s economic activity but they are the most accurate measure of a company’s true engagement with the real economy.
“Much of the €90 billion shifted to the Irish state in 2015 was the intangible assets of the technology giants who seem determined not to pay a cent of tax anywhere in the world. Fine Gael’s move that year to introduce a capital allowance deduction of up to 100% on intellectual property was inexplicable and absolutely unjustifiable. It was clearly designed as a mechanism to replace the effect of the notorious Double Irish scheme which was being used by the tech giants to pay obscenely low rates of tax.
“Once again, newspaper headlines around the world are characterising Ireland as a tax haven – in this case, the top tax haven in the world. This is doing serious damage to our reputation as a destination for investment, and it is causing anger among the leaders and the ordinary people of countries around the world who see us as siphoning off the funds that they want to see collected by their public revenue agencies.
“This report was published at the same time as the government launched its Global Ireland 2025 plan. We will never be seen as a global leader on issues of importance, or even as a responsible global citizen, until we implement real change that brings these tax-dodging schemes to an end.
“The report also comes at the same time that the Public Accounts Committee has published its important report on corporate tax in this state, finding that our over-reliance on a handful of tax receipts from multinationals poses an ‘unacceptable level of risk’ to our economy.
“The government’s approach of doing the bare minimum to combat tax avoidance is indeed posing an unacceptable risk to both our economy and to our reputation.”