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Taoiseach to French: We're not tax haven

Friday, February 07 17:13:14

Ireland is not a tax haven and Internet giants such as Yahoo are attracted to the low-tax country for sound business reasons, the Taoiseach today insisted as he fended off a new French attack on Ireland's tax regime.

"The concept of tax haven has nothing to do with Ireland," Enda Kenny told a debate at the headquarters of the Organisation for Economic Cooperation and Development on Friday.

"At European level we have made efforts to develop digital single market," he said.

"The regulatory system that we have in Ireland is a model that could be used in any other European country."

Yesterday, French President Francois Hollande struck out at "tax optimisation" by internet giant,s which have been in the front line recently of criticism that multinationals shop around and artificially pump declarable profits into low-tax countries.

This was "not acceptable" and competition conditions, including tax liabilities, should be the same for all players, Hollande said.

"We have to act with regard to these big well-known groups which lodge themselves in low-tax countries," he said in remarks taken to include Ireland.

Ireland came under attack, led by France, at the height of its debt rescue by the European Union and International Monetary Fund, to raise its baseline corporate tax rate from 12.5 per cent.

But Ireland steadfastly refused, and argued successfully that this was not much lower than many effective rates elsewhere in the eurozone and that raising taxes would cripple its recovery.

Irish Prime Minister Enda Kenny hit back on Friday at the latest criticism saying that Yahoo! wanted to follow the example of all the big internet groups.

"We have been very clear about this all along, our tax rate is 12.5 per cent, 11.9 effective, it is a matter of national competence."

Tanaiste Eamon Gilmore, asked about a recent decision by US Internet information group Yahoo! to group its user services and personal data operations for Europe, Africa and the Middle East in Ireland, said that this was not surprising.

"Ireland has to some extent become an internet capital," he said.

Gilmore insisted that Ireland cooperated fully with the OECD in its work on tax optimisation aimed at developing common rules for such practices that may be legal, albeit artificial.

"There is scope for improvement at international level," he said.