‘Levy taxes where value is created’

LEO Varadkar has signalled that Ireland is committed to global tax reform – but in an apparent defence of Ireland’s tax arrangement he said tax ‘should be paid where value is created’ rather than where products are sold.

Ireland is one of seven EU countries identified by Brussels as facilitating multinationals to cut their tax bills. The EU has said such tax practices ‘undermine fairness’.

After his meeting with Donald Tusk, Mr Varadkar signalled Ireland is ready to address the issue. ‘We are committed to tax reform at a global level. We’re therefore very supportive of the OECD BEPS (base erosion and profit sharing) process,’ he said.

‘It’s a strong view that large companies should pay their fair share of tax. We believe, as a principle, that company taxation should be paid where value is created. So, whether it’s a digital company or an aircraft manufacturer, value is created where things are designed, marketed and made. That’s where the profits are earned.’