The Irish government has entered into a war of words with American president Barack Obama and insisted it does not facilitate tax evasion.

Enterprise Minister Richard Bruton led the reaction to the President’s damning speech on Friday when he criticised American companies who move their tax headquarters to Ireland.

In response, the Irish Times reports that the Dublin Government has insisted it does not facilitate tax inversion practices.

Burton, Minister for Jobs and Enterprise, told President Obama that the rule which allows US multinationals dramatically reduce their tax obligations by transferring their headquarters to other countries including Ireland was a matter for the US to resolve.

He remarked that it is not up to Ireland or other countries to sort out America’s tax affairs.

And the report says he went to considerable length to draw a distinction between ‘Ireland’s ‘robust strategy of offering a low rate of corporation tax and the practices referred to by president Obama.’

Minister Bruton said: “That is very different from what is being discussed in the media over the past few days in terms of tax inversion and company relocating their headquarters.

“Ireland does not promote such investments nor do we want such investments. They actually cost us money. We derive no benefit from them.

“It’s an issue that needs to be fixed but fixed in the US. President Obama in his comments has indicated that he is willing to change US tax law.”

President Obama had accused American companies of ‘gaming the system.’

He singled Ireland out for mention in his damning speech but Burton’s cabinet colleague Simon Harris, Minister of State for Finance, insisted it is an issue for the American authorities to resolve.

Harris claimed the Irish Government has already conveyed that message to the US federal government.

He said: Ireland derived no benefit from the arrangement in terms or jobs or revenue going to the exchequer.

“It actually costs Ireland money as contributions have to be made to the EU arising out of companies declaring Ireland as their headquarters.

“We are talking about very distinct and different issues here between corporation tax and inversion tax. It’s important that they do not get blurred.”