‘Single Malt’ type tax shelter revelations leave Government with serious questions to answer

14 September 2021
  • Minister must move to finally end ‘Single Malt’ tax structure
  • Revenue Commissioners must clarify level of knowledge of this case and if others exist
  • Revelations will call into question commitment to global tax reform and fairness

Labour Finance spokesperson Ged Nash has said the government has serious questions to answer over revelations that a major pharmaceutical company is actively using tax structures with all the hallmarks of a corporation tax avoidance scheme Minister Donohoe has said was closed off under an Ireland-Malta tax treaty in 2018.

A detailed report from Christian Aid illustrates how a ‘Single Malt’ type corporate tax avoidance vehicle is being used lawfully by Abbott Laboratories in order to avoid paying almost €500 million of profits relating to intellectual property for its rapid diagnostic tests, including Covid-19 tests. 

Deputy Nash said;

“These revelations mean that the government has very serious questions to answer over the continued operation of tax structures the likes of which Minister Donohoe said were abolished under the 2018 Ireland-Malta tax treaty. 

“This elaborate game of pass the parcel carried out between four Abbott related companies incorporated in Ireland (some resident for tax purposes here with others in Malta) sees Maltese tax breaks for intellectual property exploited and appears to enable the by-passing of anti-tax avoidance measures in the US. 

“In part, Malta’s tax laws enable these structures to continue but so too does the narrow drafting of the 2018 treaty between that country and Malta. 

“In 2018 Minister Donohoe moved to end the so-called ‘Single Malt’ which he euphemistically described as “aggressive tax planning.”

“It now turns out that at least one major company appears to still be utilising this kind of abominable tax avoidance structure which is also depriving countries in the developing world of taxes rightly due to them from the sale of Covid tests.

“The Minister for Finance needs to respond to these embarrassing revelations. He must confirm if his department was aware that these kinds of structures were still available to be exploited after the Ireland-Malta agreement was signed. If so, was a blind eye turned by his Department? Based on these revelations the Minister must pledge to finally wipe these structures out.

“The Revenue Commissioners must also clarify what knowledge they have of the arrangements operated by these Abbott related companies and if they are privy to them at any level. They must also clarify if they are aware of other companies incorporated in Ireland and with whom they have a relationship as the State’s tax authority who are taking advantage of these kinds of structures.

Deputy Nash continued; 

“Today’s revelations will once again call into question Ireland’s commitment to progressive international tax reform, justice and transparency.

“In 2018, the Minister for Finance refused to sign Ireland up to OECD efforts to broadly tackle such tax avoidance schemes, specifically in relation to Article 12 of the 2017 Multilateral Instrument. 

“Instead we chose to act alone, but the case reported today yet again illustrates that a “whack-a-mole approach” to tax loopholes as described by Christian Aid simply doesn’t work when the tax avoidance industry remains one step ahead.”

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