The call by Germany's finance minister Wolfgang Schaeuble for Ireland to show some movement on corporation tax does not reflect the attitudes taken in finalising the new Double Taxation Agreement (DTA) between Ireland and Germany.

The terms of the new German-Ireland DTA suggest an acceptance that the Irish tax system is both reliable and fit for purpose within a modern economy. If this were not the case, it is unlikely that there would be no source country only taxation of royalties or interest, as featured in the DTA. The treatment of dividends is entirely standard, and relatively benign. A new and progressive element is the approach to the taxation of pensions, where one taxing authority had already given significant tax relief towards the funding of those pensions.

The terms within which Ireland and Germany will mutually conduct their tax affairs are comparable to the terms which Germany has agreed with economies such as the United Kingdom. They are more favourable than the terms which Germany has agreed with certain other EU member states.

The German DTA negotiations took place over a period of a number of years, but were only finalised recently.