Foreign multinationals moved €90bn of corporate tax profits to Ireland in 2015
A new study has described Ireland as the biggest corporate tax haven in the world.
Economists in the US and Denmark estimate that foreign multinationals moved €90bn of corporate tax profits to Ireland in 2015 alone.
The figure would put Ireland ahead of all the islands of the Caribbean combined.
It would also put the country ahead of Singapore and a range of other European countries that use tax policies to attract investment.
The Department of Finance last night rejected much of the findings and described them as "overly simplistic."
The paper warns that US multinationals declared $8 of profit in Ireland for every $1 spent on salaries and wages - around 16 times the average for “non tax havens.”
The researchers warned that ‘profit shifting’ by multinationals costs the world’s tax authorities $170bn a year.
They said it reduces taxes paid by multinationals in the EU by 20%.
“By our estimates, Ireland is the number one shifting destination, accounting for more than $100 billion alone,” the study notes.
Meanwhile a new report from the Oireachtas Public Accounts Committee notes that eight of the biggest 100 corporate tax payers in Ireland paid no tax at all in 2015.
Meanwhile 13 of the top 100 paid less than 1% corporation tax.
The report warns that there is unacceptable levels of risk in relation to corporate tax – with almost 40% of the overall take coming from just 10 companies.
PAC Chairman Sean Fleming says there's a number of reasons large companies may pay nothing:
“The reason that arises is that a company like that could have significant losses forward – they might have a big trading income,” he said.
“For example [...] that could be bank that has €1bn profits but because they have losses forward, they are paying no tax.
“I am not saying those companies are the Irish banks but I can see how organisations that have profits today with losses forward from a previous year might be paying no tax today.”