THE DEPARTMENT OF Finance has rejected the findings of a study claiming that Ireland is the world’s biggest “tax haven”, saying the researchers didn’t even define what a tax haven is.

Research published earlier this month said that multinational companies shift around 40% of their profits out of their home countries into tax havens in order to shelter their profits.

The study, which was carried out by academics from the University of California, Berkeley and the University of Copenhagen, estimated that foreign companies channelled €90 billion of their corporate profits through Ireland in 2015.

This put it well ahead of all of the Caribbean islands combined.

The paper’s authors, economists Gabriel Zucman, Thomas Torslov and Ludvig Wier, wrote:

By our estimates, Ireland is the number one shifting destination, accounting for more than $100 billion alone.

Singapore, the Netherlands, the Caribbean and Switzerland were the next biggest tax havens according to the research.

The study, which is called The Missing Profits of Nations, notes that foreign corporations have an, extremely high, profitability ratio of 800% in Ireland. It says this contrasts dramatically with all non-haven countries.

The Department of Finance dismissed the study’s findings saying that it fails to provide any definition for a tax haven and merely asserts that Ireland, and other countries, are tax havens without providing any rationale for that assertion.

Ireland is not a tax haven and does not meet any international standards for being so considered.

It added:

Suggestions that Ireland are a tax haven simply because of our longstanding 12.5% corporate tax rate are totally out of line with the agreed global consensus that a low corporate tax rate applied to a wide tax base is good economic policy for attracting investment and supporting economic growth.

The paper says it used a 1993 list of “havens” drawn up by US tax academics, James Hines and Eric Rice, and added the Netherlands and Belgium.

Finance Minister Paschal Donohoe said that Ireland outperforming the Caribbean islands was explained by the economy attracting jobs and investment across the period when the study took place.

He also said that Ireland has taken steps to change its tax system to meet the requirements of the the Organisation for Economic Co-operation and Development (OECD).

“We have an open economy, which is a core strength of how we create jobs in our country,” he said.

If you look at developments in our corporate tax code over the last few years now we have eliminated stateless companies, we’re phasing out the double Irish and we’ve made many of the changes that are required of us by the OECD.

“The OECD in their latest assessment of our tax code said that we had attained the highest rating possible in terms of transparency. What we have is a competitive tax policy,” the minister said.