Pressure elsewhere could play to Ireland’s favour

Today’s report by the House of Commons Public Accounts Committee on the issue of Google’s tax affairs is another media story that brings to international attention the use multinationals make of Ireland as part of their aggressive international tax avoidance structures.

While the Taoiseach Enda Kenny, speaking to the Irish American Chamber of Commerce yesterday, repeated the line contained in the recent letter sent by the Irish ambassador to Washington, Michael Collins, to a US Senate committee, about Ireland not fulfilling any of the OECD's criteria for tax havens, that committee's response to the letter showed clearly the difficult PR position Ireland finds itself in.

High-profile committees of politicians in Washington and London find Ireland’s position an easy one to attack and the Taoiseach, as no mean political operator himself, must know this more than most.

While the establishment here clearly views the damage being done to Ireland's reputation as significant, it remains very unclear as to whether anything can or will be done that will negatively affect Ireland's contribution to the international tax structures used by companies such as Apple and Microsoft.

In fact, if one outcome of all that is going on is further pressure on jurisdictions such as Bermuda and the Cayman Islands, that could play to Ireland’s favour. Likewise any move by the US authorities to prevent its multinationals using royalty payments to shift their profits to tax havens, could play to Ireland’s benefit.

It is interesting to note Bermuda's stance yesterday apparently in defiance of David Cameron and the British Government. A fascinating aspect of the whole debate is the way London plays a key role in the position of some of the main offshore havens on the globe. It is one thing to put millions and billions of pounds on deposit on small, sandy islands in the Caribbean, but would you do so if you didn't think you had British property laws as a comfort while doing so?