Competition between development agencies to attract foreign direct investment (FDI) is a longstanding feature with particular interest for regions of the UK and for Ireland.
Ireland has enjoyed continuing successful results partly aided by a 12.5% corporate tax rate.
Both the OECD and the EU have been developing policies aimed at removing tax arrangements that benefit multinational companies which, under existing international tax rules, shift the reporting of profits to low tax countries including Ireland and offshore places such as islands in the West Indies.
Currently, both the Organisation for Economic Co-operation and Development (OECD) and EU are ready to commend changes which their member states are likely to accept which will reduce the effect of tax incentives on the attraction of FDI.
This is not a new debate. International agencies such as the OECD have been working to broker codes of conduct so that business profits are taxed more closely to the place where they are earned.
Even the apparently objective criterion of assessing profits where they are earned can be difficult to implement.
If a business has developed special processes for which there may be patent or intellectual property rights, the accountants and lawyers can register those IP rights as being held in a separate jurisdiction so that most of the profits are shifted to a country with a lower tax regime.
The OECD is considering proposals that would allow national authorities either to base corporate tax levies on the revenue earned in a specific market (the country where the transactions take place) or to impose a proportionate flat rate of taxation on overall profits (with no regard to tax planning) as attributed to a particular country.
The EU in a separate decision has voted to require all large multinational companies to publish their turnover and profits earned in each country.
One way or another, multinational companies will find that their tax assessments will shift to fall more heavily where profits are actually earned.
Northern Ireland agencies should take a close interest in the impact of these changes. First, the UK is likely to exercise its influence on the final OECD agreement and then to incorporate the changes in UK corporate tax law.
Second, Northern Ireland businesses will have an interest in the implications for the location of multinational companies considering investment in Ireland.
The post-Brexit arrangements have put local businesses into a closer environment.
The Irish authorities are closely interested in the possible changes in international taxation agreements since the search for changes which attribute taxation more closely to the location of a business are something of a threat to the continued operation of many international businesses.
The potential adverse impact on investment in Ireland and Irish taxation receipts has been recognised for some time and gave rise to a recent case brought by the European Commission.
However, the Irish Government was successful in pleading that Irish corporate taxation did not offend Commission tax rules on State Aids. A possible appeal is still pending.
The OECD proposals opening the door to attributing profits in different countries in proportion to turnover, or proportion of business, may mean that large Irish registered subsidiaries of multinational businesses would face larger tax charges in other countries to the detriment of Irish taxation.
Since Northern Ireland and Ireland will be closer competitors for FDI in the new post-Brexit regime, the OECD proposals may have an indirect knock-on effect for a renewed FDI campaign here.
Northern Ireland will be demonstrating the advantages of offering a location that has an unfettered GB market as well as being able to claim a location within the trading remit of the EU.
The Irish ability to offer much lower corporate tax rates may be reduced as a consequence of the OECD proposals.
The Irish authorities can be expected to defend, as far as possible, the existing regime. That will be difficult in both the EU and OECD.
Northern Ireland authorities must now reconsider whether there is still a valid case for exercising the option, approved three years ago by the UK Treasury to offer a separate local rate of corporation tax.
The Chancellor's decision to revert to a 25% rate in 2022 has potentially widened the gap between Ireland and the UK.
This poses a challenge for the recently appointed NI Fiscal Commission. It will be expected to offer early advice to Minister of Finance Conor Murphy and, in turn, he will be expected to take the issue to the Executive.