The Government has been warned against any early unilateral move to recast Ireland’s corporate tax regime by tax advisers to major American multinationals.

The Washington-based Tax Executives Institute said in a submission to the Department of Finance that any sudden change to Irish tax rules would damage the interests of multinational investors in Ireland.

The group, which says it represents the views of in-house tax advisers to 3,000 major firms in the US and Europe, also said any Irish move before similar steps by other countries “may not be prudent”.

The submission from the institute was signed by its president Terilea Wielenga. She is tax adviser to the pharmaceutical company Allergan, which has a big operation in Westport, Co Mayo, and an office in Dublin.

“Multinational enterprises have structured their business activities in Ireland taking into account the current tax regime and have assumed after-tax economic returns on their investments at a certain level for the foreseeable future,” Ms Wielenga said.

“An abrupt change to those rules would disrupt these enterprises’ activities and place them at a significant economic disadvantage compared to their competitors.”

Contentious elements

The intervention comes as the Government examines whether it should make early changes to the most contentious elements of the Irish regime ahead of a looming overhaul of global tax rules by the international community.

At issue is whether steps are taken in the October budget to gradually wind down a controversial tax scheme known as the “double Irish”, a mechanism which enables big firms such as Google to cut their international tax payments.

The department carried out a consultation over the summer and received submissions from more than 20 groups, among them the Tax Executives Institute.

Groups such as accountancy firms Ernst & Young and Deloitte, the Irish Tax Institute and the Consultative Committee of Accountancy Bodies – Ireland have adopted a questioning approach in their observations.

The consultation comes ahead of non-binding recommendations to overhaul global tax rules from the Organisation for Economic Co-operation and Development in Paris, expected next month .

Aggressive practices

The OECD review was initiated by global leaders, among them US president Barack Obama, who are concerned that multinational groups are deploying aggressive practices to avoid paying tax. The OECD review will not conclude until November 2015, and only then would the question of a binding multilateral plan come into play.

As the review comes amid international pressure on Ireland over schemes such as the “double Irish”, the objective behind any unilateral Government move would be to secure better terms for phasing out such mechanisms.

However, Ernst & Young said in a circular that key competitors for investment “are not rushing to dismantle elements of their regimes” which may ultimately require amendment due to the OECD plan.

In its submission, Deloitte said the perception and the reality of how Ireland deals with the “double Irish” structure was important for foreign direct investment.

Deloitte recognised that Ireland may choose to unilaterally change certain tax rules such as the “double Irish”, but said other European countries and countries outside the EU may choose to retain their equivalent structures until the OECD project ends before deciding on action.