Dono­hoe to ex­am­ine ‘Sin­gle Malt’ loop­hole

Min­is­ter con­firms cer­tain com­pa­nies us­ing struc­ture as tax-avoid­ance mea­sure

The Irish Times - Business - - FRONT PAGE - SUZANNE LYNCH in Wash­ing­ton

The Gov­ern­ment is to ex­am­ine the use of the so-called “Sin­gle Malt” tax struc­ture that is be­ing used by large multi­na­tion­als to re­duce their tax bill, the Min­is­ter for Fi­nance has said.

Speak­ing in Wash­ing­ton where he is meet­ing US of­fi­cials to dis­cuss trade and tax mat­ters, Paschal Dono­hoe con­firmed that cer­tain com­pa­nies were us­ing the tax struc­ture as a tax-avoid­ance mea­sure since the abo­li­tion of the “Dou­ble Ir­ish”.

“I will ex­am­ine this mat­ter in more de­tail to see what is the ef­fect it’s hav­ing, both in Ire­land and within Malta,” he said.

“We have al­ready done work in re­la­tion to the spillover ef­fects of tax pol­icy in Ire­land on other ju­ris­dic­tions and this is a mat­ter that, inside the com­mit­ments we have within the OECD, that we will ex­am­ine.”

Tax bills

He said it was “ab­so­lutely not” the in­ten­tion of the Gov­ern­ment to cre­ate tax planning op­por­tu­ni­ties for com­pa­nies that want to re­duce their tax bills, not­ing that the emer­gence of the new tax de­vice was a re­sult of the “in­ter­play be­tween dif­fer­ent tax ju­ris­dic­tions”.

“It is a very strong ex­am­ple of why cor­po­rate tax re­form needs to be done in a co-or­di­nated man­ner, across the Euro­pean Union and glob­ally, be­cause much of the dif­fi­cul­ties that have de­vel­oped in re­la­tion to global tax­a­tion hap­pened be­cause of the in­ter­play be­tween the tax regimes in dif­fer­ent ju­ris­dic­tions,” he said.

As re­ported in The Ir­ish Times, aid agency Chris­tian Aid has high­lighted the fact that tax ad­vis­ers are now point­ing clients to the “Sin­gle Malt” ar­range­ment which en­cour­ages com­pa­nies to di­vert prof­its to coun­tries with which Ire­land has a dou­ble tax­a­tion agree­ment but which have a very low cor­po­rate tax rate such as Malta.

Ir­ish-Amer­i­can trade

The Min­is­ter was speak­ing dur­ing a four-day visit to the US where he is meet­ing se­nior po­lit­i­cal fig­ures in Wash­ing­ton, in­clud­ing White House bud­get di­rec­tor Mick Mul­vaney and trea­sury un­der sec­re­tary David Mal­pass, to push the case for Ir­ish-Amer­i­can trade.

Mr Dono­hoe trav­els to New York today where he is to meet sev­eral US com­pa­nies with in­ter­ests in Ire­land, in­clud­ing JP Mor­gan Chase, Citi Bank and fi­nan­cial soft­ware com­pany Fen­ergo.

Mr Dono­hoe’s visit co­in­cides with a key week for tax re­form in the US, as both houses of Congress race to ad­vance their tax re­form plans be­fore next week’s Thanks­giv­ing re­cess.

A vote in the House of Rep­re­sen­ta­tives is ex­pected as early as to­mor­row, with US pres­i­dent Don­ald Trump due to visit Capi­tol Hill today to help se­cure agree­ment.

Among the changes un­der con­sid­er­a­tion are a cut in the US cor­po­rate tax rate to 20 per cent, though the se­nate plan favours de­lay­ing this un­til 2019, as well as a one-off tax on over­seas prof­its to en­cour­age repa­tri­a­tion.

PHO­TO­GRAPH: COLLINS

Min­is­ter for Fi­nance Paschal Dono­hoe: meet­ing US of­fi­cials to dis­cuss trade and tax­a­tion.

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