THE Department of Finance were angered over a report by Oxfam which highlighted Ireland as a tax haven saying it painted an “wholly inaccurate picture”.
The report Tax Battles had claimed that Ireland was the sixth worst country in the world for facilitating tax avoidance, behind only Bermuda, the Cayman Islands, the Netherlands, Switzerland, and Singapore.
Internal correspondence between the Department of Finance and Oxfam reveals how the Irish government bitterly disputed the report.
And when Oxfam looked for a meeting with the Minister for Finance Michael Noonan to discuss the issues raised, they were told he was not available due to “diary commitments”.
A letter sent to Oxfam’s chief executive Paul Clarken picked apart the Tax Battles report saying Ireland met none of the international criteria for being a tax haven.
It said inclusion of the 12.5% corporation tax rate was “totally inappropriate and inaccurate”.
“Ireland’s corporate tax policies are designed to attract real and substantive operations to Ireland,” it said. “Ireland has not been and never will be a brass-plate location.”
The Oxfam report also criticised Ireland’s tax incentives including the latest government initiative, the so-called ‘Knowledge Development Box’.
The Department insisted: “While a number of countries not included on the Oxfam list have Boxes which failed [international] rules and were considered harmful, Ireland’s Box was fully approved.”
Minister Noonan’s officials also objected to Oxfam criticism of profit shifting activities, where multinationals aggressively avoid tax by moving profits from high tax countries to low tax jurisdictions.
They wrote: “These misunderstandings of the Irish regime and Ireland’s positions on international tax issues contribute to the fundamentally inaccurate portrayal of Ireland as a tax haven.”
The Minister’s Private Secretary then said officials would be made available to discuss their “serious concerns” over the report.
In response, Oxfam’s Jim Clarken said that they welcomed Department of Finance efforts to pursue international tax reform.
However, they said that developing countries were still losing US$100 billion in tax revenue because of the policies of countries like Ireland.
Mr Clarken again sought a personal meeting with Minister Noonan ahead of his appearance at an Oireachtas Committee on Finance, Public Expenditure and Reform.
The Department declined the request citing “on-going diary commitments” but said officials were still available.
In a statement, the Department said: “It was determined that as most of the issues were around the technical analysis carried out in the reports and as wanted to discuss the detailed technicalities with Oxfam, it made greater sense for discussions to take place between officials and Oxfam rather than between Oxfam and the minister. A meeting was subsequently held between Department officials and Oxfam.”
The charity said they had met with the Department in February to discuss their concerns but that they “stand over the findings” of their report.
They said they would be meeting again with officials to discuss two follow-up reports on corporate tax and tax havens in Europe.
In a statement, they said: “The Irish government relies on the OECD definition to assert it isn’t a tax haven. We contend that such standards are insufficient in relation to corporate tax avoidance.”
They also said that a study by the EU Commission in 2016 on aggressive tax planning structures showed that Ireland had no less than ten of the structures identified in place.
“We [also] pointed out that Ireland has not been very supportive of attempts by the EU to introduce more effective measures to end corporate tax avoidance such as public country by country reporting,” they said.
“We also questioned Ireland’s commitment to transparency as it has not agreed to the public element of country by country reporting rules, public listing of beneficial ownership and making tax rulings public.”
Internal memos also reveal that coverage of the report internationally was being closely monitored by the Department of Finance.
The fiscal attaché of Ireland’s Permanent Representation in the EU wrote to the Department saying: “Most papers are rather sceptical towards the report.
“The FAZ (Frankfurter Allgemeine Zeitung) speculates that European countries are heavily represented in the Oxfam study primarily because of our higher tax transparency, and a high awareness level of tax practices in European countries, which is not the case for ‘some really infamous tax havens’ elsewhere in the world.”
A tax briefing prepared for Ireland’s Ambassador in the United States also included speaking points on how best to handle questions about the report.
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