Ireland wants Brazil to take it off a list of notorious tax havens 'as soon as possible'
But the government has been waiting nearly six weeks without a response.
IRELAND HAS FORMALLY asked Brazil to remove it from a group of countries blacklisted as tax havens, however it has not received a response in nearly six weeks.
Earlier this year Brazil’s department of federal revenue added Ireland, Austria, Curaçao and Saint Martin to its list of countries denominated as tax havens.
Other jurisdictions on the list include notorious jurisdictions such as Panama, Monaco and the Isle of Man.
The category in which Ireland is listed features countries that charge no corporate taxes, hide banking or trade information, or have corporate income tax rates of less than 20%.
Because of the Republic’s inclusion on the blacklist, Irish companies will have to pay a 25% tax rate on deals with Brazilian businesses – instead of the 15% rate they would otherwise have been subjected to.
Irish officials previously said that they “strongly refute” allegations that Ireland is a tax haven, and it has now emerged that the Department of Finance has made a formal request to its Brazilian counterpart that the country be removed from the register.
The Brazilian parliament
A spokesman for the Department of Finance said: “A formal request for Ireland to be removed from the Brazilian list was submitted by Ireland to the Brazilian federal revenue service on 27 September.
“Contact is ongoing between the embassy and Brazilian revenue but we have not yet received a formal response.”
The department’s spokesman added that the government was looking for an answer and Ireland’s removal from the list “as soon as possible”.
Fully compliant
When asked what grounds officials had cited for having Ireland removed from the blacklist, the spokesman said the Republic ”does not meet any of the international standards for being considered a tax haven”.
“Ireland is fully compliant with all international best practices in the areas of tax transparency and exchange of information,” he said.
“Ireland is a committed and active participant in international efforts to reform the international tax system.
“On Budget day, Minister Noonan published an update on Ireland’s international tax strategy which highlights our continuing efforts in this regard.”
Finance Minister Michael Noonan
The Brazilian revenue service had not responded to Fora’s request for comment at the time of publication.
Trouble with tax
Irish officials will be eager to get the country off Brazil’s blacklist as the move has heaped more unwanted attention on the local corporate tax regime after several months under the international spotlight.
Brazil first put Ireland on the list a little over a month after Brazilian multinational JBS, the world’s biggest meatpacking company, announced restructuring plans that would see it shift €30 billion worth of its assets to a new Irish entity. That move has since been called off.
More notably, the EU recently ordered US tech giant Apple to pay the Irish state €13 billion in taxes - drawing accusations that the Republic had been encouraging tax avoidance on a major scale.
Ireland is also likely to oppose a new EU proposal that would result in a common consolidated corporate tax base across the bloc’s member states.
Many Irish officials fear that the proposal could be the first step towards a common EU tax base that would negate the advantage of Ireland’s low company tax rate for attracting foreign investment.
