Wednesday, July 8, 2020

Ireland in the OECD’s aggregate Country-By-Country Reporting (CbCR) data

The OECD have released anonymized aggregate data by jurisdiction of ultimate parent and partner country for MNE groups.  The data come with a significant disclaimer and only cover a single year (2016).  Still, they show what can be shown with the data.

Here will be focus on the figures for Ireland.  A reliability check was carried out by the Revenue on the figures.  These are the aggregate figures (note: financial values are in millions of US dollars). Apart from the ‘total’ row all the figures are as reported on the OECD database.  The ‘total’ row is calculated from the constituent figures.Click to enlarge.

OECD CbCR data for Ireland 2016

The Irish figures are unusual (see the chart on page 40 of the OECD report) but are not unexpected.  The dominance of US firms in the Irish data is clearly evident.

Of the totals, three-quarters of revenue and two-thirds of profit arise in US companies included in the data.  Of the $5.5 billion of cash payments for corporate income taxes in the table $4.3 billion (78 percent) came from US companies.

The role of Ireland in the tax strategies of MNEs is a topic of frequent discussion.  What this, and other, data highlight is that this is almost exclusively linked to US companies.  This points to the issue being something that is specific to US tax laws rather than general to Irish tax laws.

We can use the above data to get some effective tax rates.

OECD CbCR data for Ireland 2016 ETRs

In overall terms, the companies in the data had an effective rate rate of 12 per cent on a cash basis (and 11.4 per cent on an accrued basis).  The profit figures for some of the countries are small (or negative) and the ETR for any single year may not be that informative.

Focusing on the largest countries in the data we can see that the ETR for US companies on a cash basis was 13.6 per cent.  The other significant parent jurisdiction in the data are domestic MNEs headquartered in Ireland.  The Irish MNE groups in this data had an ETR on a cash basis of 6.3 per cent.

As noted above this data only covers 2016 so is already somewhat dated.  The OECD plan on publishing data for subsequent years which will only add to usefulness of this data by allowing changes to be identified.

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