I congratulate Deputy Hayes on making his maiden speech in the Dáil. I did not expect to be saying that at this stage. However, I congratulate him and his supporters who join him today. As a small open globalised economy that is home to substantial levels of foreign direct investment, elevated levels of intellectual property, and by extension capital allowances associated with that intellectual property, are inevitable. The development, enhancement and exploitation of this intellectual property in Ireland forms a key part of the activities of multinational enterprises in Ireland and especially so in the IT and pharmaceutical sectors. Capital allowances associated with such activity are an ordinary part of any corporation tax system. The OECD Base Erosion and Profit Shifting, BEPS, project introduced rules to better align substance and intellectual property. As a result, Ireland has seen a significant increase in onshoring of intellectual property in recent years, as multinational enterprises aligned intellectual property previously held offshore with the substantive economic activities that take place here, including the hundreds of thousands of jobs in these sectors in Ireland. Ireland was not the only country to benefit from intellectual property onshoring since the BEPS actions were agreed in 2015. Groups also onshored intellectual property to the US and to other jurisdictions worldwide where they have located substantial operations. Recent articles highlight the exposure for the Irish economy of the recent onshorings, not least the vulnerabilities and concentration of risks associated with our corporate tax receipts. This Government and successive Ministers for Finance have been cognisant of these risks. While these revenues are welcome, they may well be transitory and cannot be relied on to fund ongoing spending commitments, which the Government has recognised through the establishment of two long-term funds, the Future Ireland Fund and the Infrastructure, Climate and Nature Fund. It is important that we continue to support the establishment and growth of domestic businesses to improve the resilience of our corporate tax revenues. Ireland's corporate tax policy, and broader industrial strategy, has consistently focused on attracting real and substantive investment that brings jobs and real activity to Ireland. The elevated level of intellectual property in lreland is a natural outcome of having the substantial operations of many of the world’s leading multinational companies with investments here. This investment creates real and substantive employment and economic activity in the State. The IDA has indicated that employment by its client companies is in excess of 300,000 people, with more than 110,000 people employed in the information and communications services sector and more than 109,000 in modern manufacturing alone. This demonstrates the real economic activity taking place which is underpinned by the elevated levels of intellectual property which is exploited, developed and enhanced through those Irish entities. Ireland has fully implemented agreed new international tax standards, including transposition of the anti-tax avoidance directives, implementation of the BEPS action plan measures, and implementation of the OECD Pillar Two minimum tax agreement. Ireland's tax rules are in line with international norms. We have been, and continue to be, an attractive location for foreign direct investment as evidenced by the good jobs provided by multinational enterprises in the State. Tax is only one element of this story, with other factors such as: a young, educated workforce; political stability; a common law legal system; access to the EU market; ease of doing business; tax certainty; and pro-business regulation also being key features.

Sentiment score: 0.47

I find it somewhat bizarre that the Deputy is critical that this is the first time this is being raised in the Dáil when he has been here six months himself and this is the first time he spoke.

Sentiment score: -0.51

Regardless, as I mentioned in my opening statement, capital allowances for intellectual property are a normal part of any tax system. The tax system provides relief in the form of capital allowances against trading income for capital expenditure incurred on the provision of intangible assets for the purposes of trade, both acquired and internally developed. IP allowances may only be deducted from income generated by those assets and a cap applies. A maximum of 80% of relevant profits may be offset by capital allowances in any year, which is below the EU average of almost 82%. Intellectual property is an important aspect of any modern multinational enterprise, but especially in the IT and pharmaceutical sectors, as the Deputy is no doubt aware. Recent years have seen a substantial period of reform through the OECD BEPS programme which has resulted in real changes to global multinational activities, with firms moving away from locations with little substance to key centres in their value chains including Ireland, as activity in tax havens is wound down. Ireland has continued to implement many reforms to our tax systems in recent years, including the introduction of the EU anti-tax avoidance directive and defensive measures on outbound payments and we are fully compliant with the OECD standards of transparency and exchange of information about tax measures. Ireland has been to the forefront in implementing the OECD international tax agreement which seeks to address the tax challenges arising from the digitisation of the economy. Ireland has implemented the agreed OECD Pillar Two minimum effective taxation rate of 15% and we remain deeply engaged in the ongoing work to finalise Pillar One of the agreement. Our long-standing position remains that the international tax system needs to keep pace with how business is now conducted globally.

Sentiment score: 0.27