Donohoe to examine ‘Single Malt’ loophole
Minister confirms certain companies using structure as tax-avoidance measure
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.”
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.
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.
Minister for Finance Paschal Donohoe: meeting US officials to discuss trade and taxation.