Ireland could have done more to address corporate tax loopholes in its application for €1bn in pandemic recovery funding, the EU has said.

While the European Commission approved Ireland’s spending plan today, EU officials said the Government has only “partially addressed” a series of annual economic recommendations on taxation and money laundering.

“It’s clear that we consider that more could even be done on anti-money laundering,” said one Commission official, who did not wish to be named.

"It’s a step in the right direction. It’s not the last step,” said another official.

Under its anti-money laundering commitments, the Government has said it will increase supervision and inspections of trusts, which are legal entities usually set up by accountants or lawyers on behalf of companies or investors.

The Commission said Ireland could have done more to supervise the professions that set up the trusts.

Ireland also plans to apply withholding tax on payments to zero-tax jurisdictions by 2024, but will not do this for “low-tax” jurisdictions, which the Commission would have preferred.

Ireland’s failure to sign up to an international corporate tax deal brokered by the Organisation for Economic Cooperation and Development (OECD) will not impact the plan, the Commission said.

“The discussion at the OECD level is not linked to the plan, although it’s clear that in the plan, there are some measures that go in the right direction,” the first EU official said.

Overall, the plan meets the mandatory thresholds for green and digital investment, and could add 0.3-0.5pc to economic growth by 2026, the EU said.

The bulk of the plan, or 42pc of measures, are climate-related, and include funding to help SMEs reduce emission, money to retrofit homes, an expansion of Cork’s railway network and the rehabilitation of former peat land.

Digital measures make up 32pc of the plan and include a government data centre, grants for businesses to boost connectivity and online health and pharmacy services.

On the economic front, €114m will be dedicated to retraining and boosting skills, €27m to a work placement programme and €40m to support technological universities.

The plan also includes pledges to reform the supplementary pension system, increase social and affordable housing and “progress” the Sláintecare health plan.

Ireland applied for €989m in grants from the EU’s €750bn recovery and resilience fund. It has not applied for any loans.

The Government has agreed with the EU that it will get most of the money - around €400m - by next spring, with lower annual payments of around €200m in 2023 and 2024, followed by two smaller instalments in 2025 and 2026.