Layne Hofman ■ UN calls on Ireland to ensure tax policies don’t harm children’s rights abroad
The Committee on the Rights of the Child has called on Ireland to make sure that its tax policies do not lead to corporate profit shifting which siphons resources away from low income countries and prevents them from having the resources necessary to protect and realise children’s rights.
Ireland currently ranks 11th on the Corporate Tax Haven Index which assesses jurisdictions by their complicity in helping multinational corporations underpay corporate income tax. Ireland’s role as one of the world’s largest destinations for multinational profit shifting has been recognized by the European Commission, the US Congress, and several esteemed academic researchers.
Corporate profit shifting allows multinational corporations to underpay tax by shifting the profits they make out of the countries where they genuinely have economic activity and into tax havens. This allows the corporation to under report its profit in the country where it does business (usually a low or middle income country) in order to pay less or no tax.
In July 2020 a coalition of organisations from Ireland and Ghana, together with the Tax Justice Network, made a submission to the UN Committee on the Rights of the Child demonstrating how Ireland fails to meet its obligations under the Convention on the Rights of the Child due to its facilitation of cross-border tax abuse, particularly its role in enabling corporate profit shifting. In its own report, the Government of Ireland asserted that its tax policy does not contribute to tax abuse nor negatively affect the economies of low income countries. However, the same coalition submitted a new report in August 2022 refuting Ireland’s claims and providing updated analysis and evidence on Ireland’s leading role in corporate profit-shifting.
In the Concluding Observations just released, the Committee on the Rights of the Child recommends that Ireland: “Ensure that [its] tax policies do not contribute to tax abuse by companies registered in the State party but operating in other countries, leading to a negative impact on the availability of resources for the realization of children’s rights in those countries.”