US told of concern over State's 'low-tax' label

IRELAND’S AMBASSADOR in Washington has written to the US treasury department expressing concern about the State’s “unjustified” inclusion in a document about low tax jurisdictions with the Netherlands, the Cayman Islands and Bermuda, the Dáil has heard.

Tánaiste Mary Coughlan said the Ambassador had written on the Government’s behalf about “our inclusion in this report”, prepared by the General Accountability Office (GAO), the investigative arm of the US Congress.

Stressing that the US does not consider Ireland a tax haven, Ms Coughlan said there were two taxation Bills. “One contains a list of 34 countries, which we are not included in. The other is a report prepared for Congress and released in December by the GAO and the GAO’s determination is based on the figures from the 1980s.”

She said: “We feel this inclusion is unjustified and we set down the reasons for it.” She had expressed the Government’s view to US treasury secretary Timothy Geiger when she met him.

The Minister was responding to Fine Gael enterprise spokesman Leo Varadkar who expressed concern that Ireland was one of only four countries and territories named in the document, which does “not call Ireland a tax haven but it is called a low-tax jurisdiction”.

In the report “one of the specific examples they give is about the fact that they want to end this system whereby companies investing in an un-named country with a 12.5 per cent tax rate are able to offset the cost of building that facility against their tax at home. So there is a specific issue there for Ireland”.

Mr Varadkar insisted that a “concerted lobbying campaign” was needed. Ms Coughlan said this “is a hugely, hugely important issue to us and we will continue to use every avenue available through corporate America, through our corporate presence here”, and at political level.

The Ambassador, a senior IDA executive seconded to Washington to work exclusively on the issue, and other agency officials “will be working ad infinitum in dealing with this issue”, she said. They had the “number one tax experts in the US” working with the IDA and a group of senior departmental officials, from Enterprise, Finance, Foreign Affairs, the IDA and the Revenue “have been meeting to monitor ongoing developments”.