World Economy

OECD Report Poses No Threat to Irish FDI

OECD Report Poses No Threat to Irish FDIOECD Report Poses No Threat to Irish FDI

Minister for Finance Michael Noonan has welcomed the publication of Monday’s OECD report saying it poses no threat to Ireland’s foreign direct investment industry. But he warned that new EU proposals on taxation should not go further than the OECD standards, NewsNow reported.

Speaking in Luxembourg where he is attending two days of finance ministers meeting, Noonan said that the new OECD rules will “play to Ireland’s advantage”, adding: “We don’t believe in aggressive tax planning.”

“We’re not a taxation haven. We never have been involved in any kind of tax malpractice. Sometimes international tax planners used Ireland, for example in the so-called the Double Irish, but the Double Irish wasn’t an Irish policy, it was a consequence of residency laws in Ireland, doubled with tax arrangements elsewhere,” he said, pointing that he had already moved to stop certain tax practices in two finance bills, including the abolition of the Double Irish in the last finance bill.

Asked if the new base erosion and profit shifting proposals took into account the needs of smaller countries, Noonan said that Ireland had contributed to the working groups while the proposals were being devised.

“We took part in all the relevant working parties and our views were taken into account. When you have a very large number of countries involved, effectively negotiating new agreements, there are compromises but we came out rather well and we were very happy by the country by country reporting. We think it will serve to encourage foreign direct investment into Ireland.”

Acknowledging that the next face in the regulation of multinational taxation would be at an EU level, he said that EU rules should not add “bells and whistles” to the international standards proposed by the OECD.

“The way that I see it is that the minimum standard piece is done, and countries will have to comply with that. When we move to the area of best practice I think the commission now will take it over. We would be very interested in ensuring that what has been decided at the OECD is the policy, and that there aren’t bells and whistles which will work against our interest, added on by the commission.” EU finance ministers are due to sign off on a proposal for an automatic exchange of tax rulings at their meeting on Tuesday.