Spokesperson on Finance Michael McGrath has said the preliminary investigation by the European Commission into Ireland’s corporation tax arrangements with multinational companies is a significant development which should end any sense of complacency from government on the issue of our corporation tax system. Deputy McGrath said it is vital to our national interests that the government deals with the EU probe as a priority and addresses any concerns that may be raised.

Deputy McGrath stated, “In recent months, Ireland’s corporation tax regime has been in the spotlight particularly arising from parliamentary hearings in the United States and the United Kingdom. I am surprised that the Government seems to have been caught completely unaware that the European Commission was launching a preliminary investigation into Ireland’s tax arrangements with multinational companies. The government must insist that this preliminary investigation be conducted swiftly in order that a cloud is not left hanging our corporation tax system indefinitely.

“It has been clear for some time that Ireland’s corporation tax rate and regime has been viewed with a degree of envy by many of our European counterparts. It is important the government establishes the reason why Ireland has been targeted in this preliminary investigation. For example, was there a complaint lodged with the European Commission against Ireland under State Aid rules?

“The 12.5% rate and the wider corporation tax regime have been key elements of Ireland’s successful inward investment strategy. The government should be under no illusions but that this EU probe poses a potential threat to our capacity to attract foreign direct investment.

“The OECD report on Base Erosion and Profit Shifting by multinational companies should form the basis of an international effort to address the issue of the amount of tax paid by multinational companies. It is a cause of deep concern that the EU Commission has now taken steps towards a possible full scale investigation into our corporation tax system.”