John Moran, Former Secretary General of the Irish Department of Finance spoke at Taxand’s Global Conference 2016 in Dublin.
Mr. Moran discussed the implications for the global tax landscape of living in a world going through a period of unprecedented change in terms of technology, public debt, global conflict and the mass movement of people combined with the decline in trust of policymakers and politicians which is fuelling a rise in populism.
In his comments Mr. Moran noted that tax systems and the way in which countries capture revenue have improved with the onset of computerisation, particularly in employment taxes and ensuring those who go to work pay their fair share. The issues that have arisen in recent years stem from the perception of some that, while new technology and communications methods have been enhanced the ability of tax administrations to collect taxes from the average person, new technology and communications methods have enhanced the ability of the wealthy and multinational corporations to avoid paying their share of taxes.
Changes across the globe were also explored in relation to corporate tax rates and particularly the fundamental difference between how big and small countries operate in this respect. Whilst large countries are comfortable that they can charge a high tax rate given their infrastructures, presence and established market, smaller countries have to work much harder to get a slice of the same cake through lower tax rates and other incentives.
Amidst this changing tax landscape, Mr. Moran encouraged the international tax world to think carefully about the impact of globalisation and what it means for the nationality of a Company – indeed, whether modern multinationals can even be considered to have a nationality.
With an increasing number of companies which have global revenues, global shareholders and a workforce and management team scattered across the globe, establishing residency is a complex matter, and one has to consider whether historic concepts like residency or nationality even have relevance anymore.