Institute Vice President Mr Liam Lynch of KPMG gave evidence on 11 June to the Oireachtas subcommittee on Global Taxation, in connection with the OECD Base Erosion and Profit Shifting (BEPS) project.

Dealing with questions from committee members, Mr Lynch pointed out that the current global tax framework grew up piecemeal, responding to events as they happened, and with few guiding principles. Recognising the need for change, he said that he strongly believed that change does need to be evolutionary, along the lines of many of the BEPS proposals, including dealing with perceived hybrid and treaty abuses, and considering the appropriateness of current transfer pricing standards.

“The BEPS initiative has much to recommend it, but it must not become a vehicle for protectionism and national self-interest of just a few larger countries. Within the EU, whatever the global outcome, the rules will have to be implemented with due regard to the four freedoms of movement of capital and people, of services and establishment, and Member States will have to comply with the state aid rules” said Mr Lynch.

Mr Lynch appeared with Mr Philip Kermode, Director of direct taxation, tax coordination, economic analysis and evaluation in the Directorate General for tax in the European Commission.