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Be Transparent, Irish PwC Tax Chief Tells Businesses

by Jason Gorringe,, London

18 February 2014

The head of tax at PwC Ireland has urged companies to "engage to explain tax strategy and halt one-way debate."

Writing in the Irish Times, Feargal O'Rourke explained the circumstances in which companies can face what appear to be non-existent or very low tax bills. He admitted that it may come as a surprise to some readers that "if you don't have a sales force or an operation in the country of sale, there isn't a tax presence."

O'Rourke also acknowledged that the claim that "some profits should be 'allocated' to the country into which sales are made is a perfectly acceptable philosophical argument."

However, this is "not the way cross-border taxation works." A company should not therefore allow itself to be "pilloried in the media for not paying its 'fair share' of taxes in the countries into which it is making sales."

O'Rourke's solution is for firms to become more transparent, which ought to "lead to a better quality debate around what a 'fair share of taxes' means and a more balanced debate as companies articulate their views more publicly than heretofore." He recommended that multinationals consult the Finance Ministry's recently published "International Tax Strategy," to enhance their understanding of "how the Irish authorities view the current global tax debate and how the Irish system is likely to evolve as part of that debate."

More broadly, O'Rourke noted that "there will be changes to our tax regime along the way which may appear dramatic." Yet "a transparent and competitive tax system can only be good for Ireland's economic prospects."

TAGS: compliance | Finance | tax | tax compliance | Ireland | tax avoidance | tax incentives | revenue guidance | ministry of finance | tax authority | multinationals | tax planning | transfer pricing | tax rates | tax breaks | revenue statistics | tax reform | Tax | Tax Evasion

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