The OECD, the organisation which co-ordinates tax policies among developed countries, has said that Ireland needs to ensure new incentives for multinationals are not exploited. 

Speaking in Dublin, Pascal Saint-Amans, the OECD's head of tax policy and administration, welcomed the Government's decision to close the "Double Irish" tax loophole. 

"It is good news we are moving in the right direction," he said. 

He said the "Double Irish" had facilitated the transfer of profits to "no tax" jurisdictions. 

In tandem with closing the loophole, Finance Minister Michael Noonan announced he is working on plans to introduce a new tax incentive for multinationals which carry out research and development work in Ireland.  

The move mirrors similar initiatives in the UK and the Netherlands which offer reduced rates of corporation tax on company profits for groups engaged in research and development. 

However, Mr Saint-Amans said countries needed to ensure there was no gap where the tax benefit occurred and where profits were generated. 

He said the OECD would have no issue with the new Irish incentive as long as it was designed in line with internationally agreed tax policies.