Irish Finance Minister Paschal Donohoe has explained the country's approach to tax evasion during a hearing of the European Parliament's PANA Committee, and said Ireland is "a strong supporter of international tax reform efforts."
Donohoe was one of several European finance ministers who appeared before the committee on July 11.
He told the committee that: "The issue of aggressive tax planning by multinational companies is a global problem that requires a global solution." He said that the focus must now be on implementing the recommendations arising from the OECD's base erosion and profit shifting (BEPS) project.
Donohoe pointed out that Ireland was one of the first countries to introduce country-by-country (CbC) reporting requirements, and one of the first to sign the BEPS multilateral instrument that aims at preventing tax treaty abuse. He said he supports the European Commission's proposal for the introduction of mandatory disclosure rules, and hopes that an agreement can be reached on this front.
Donohoe said that Ireland has supported recent work to increase the exchange of information between tax authorities, and emphasized that "remarkable progress" has been made in this area at OECD and EU level. He said the information exchanged "will play a vital role in improving the ability of tax authorities to carry out risk assessment and to target audits and interventions," and will help to reassure citizens.
With regard to the Panama Papers – the leak of which prompted the establishment of the PANA Committee – Donohoe explained that the information contained in the papers "had very limited connection to Ireland."
He said that whenever any such information does become available, it will be examined by the Irish Revenue Commissioners, to determine whether any Irish tax has been avoided and if the tax planning arrangements involved should be challenged. He added that a number of inquiries have been initiated based on data so far analyzed.
Donohoe added that, following the publication of the papers, Ireland introduced legislation to tighten its voluntary disclosure regime to exclude taxpayers using offshore schemes. Those affected were given until May 4, 2017, to make qualifying disclosures under the regime.
Donohoe said that Revenue had received more than 2,500 disclosures prior to the cut-off date, with a value of more than EUR70m (USD80.2m). Revenue is now examining all the disclosures received in further detail.