Kenny makes virtue of necessity on OECD corporate tax project

Most of the attention around Enda Kenny’s address at the Ibec dinner on Thursday related to his comments on tax, and the well-flagged plan to ease the burden on middle- and low-income earners.

However, the Taoiseach also took the chance to set out clearly Ireland's strategy for dealing with the OECD base-erosion and profit-shifting project (secretary general Ángel Gurría pictured above) or Beps. Bring it on seems to be plan.

As Kenny pointed out, Beps is a very complex project but the concept is simple: companies should be taxed where they have their substantive operations.

What this means in practice is the closing down of various loopholes that allow companies pay tax where rates are the most attractive.

Such a move is very much in line with Ireland's overall strategy for attracting foreign direct investment, according to the Taoiseach. "As you know better than most, Ireland has not been and will never will be a brass-plate location. We only have and want real substantive foreign direct investment, the kind that brings real jobs," he said.

It looks like we plan to make a virtue out of what looks like being a necessity and will ditch the plethora of measures such as the infamous double Irish that facilitate profit shifting, but presumably not before everybody else does likewise.

The hope is that once the field has been levelled of all these schemes Ireland’s 12.5 per cent rate of tax will stand to us .

“Ireland’s offering of a competitive corporate tax rate, the availability of skills, and its reputation for being business friendly is a huge advantage that other countries will struggle to match.

“As international tax loopholes progressively get closed down, our low general corporation tax rate will become even more attractive,” explained the Taoiseach.

It’s a bold move, but it looks as though we will be hedging our bets somewhat, with the Taoiseach noting that we will “improve our offering” for knowledge- based investment, research and development and intellectual property.

No need for Ireland’s corporate tax gurus to hang up their boots just yet.