Vol. 527 No. 2
59 Ms McManus asked the Minister for Finance if there are any statistics available in his Department showing the effective rate of corporation tax paid by companies within this jurisdiction; if his attention has been drawn to reports that one major company (details supplied) paid corporation tax at a rate of just 2.1%; if he considers this a satisfactory situation; and if he will make a statement on the matter. [27987/00]
Company profits are taxable at a number of rates which depend on the nature of a company's activities. Income from manufacturing and certain other activities, such as IFSC and Shannon trading activities, is taxable at 10%, income of small and medium enterprises where total trading income does not exceed £50,000 is taxable at 12.5%, income from dealing in residential development land is taxable at 20%, other trading income is taxable at 24% and other income at 25%.
Corporation tax is not charged on accounting profits but on the taxable profits of companies. These are generally calculated by reference to the financial statements of the company. The trading profits computed under accounting principles are then adjusted to take account of specific provisions of the Taxes Consolidation Act, 1997. These adjustments include the disallowance of charges for commercial depreciation, entertainment expenses and certain motor expenses and the allowance of capital allowances, losses of the company and its fellow group companies and other reliefs and exemptions.
Revenue does not have readily accessible data on accounting profits. The data captured from companies' tax returns relates to taxable income. Data available for accounting periods of companies ending between April 1998 and March 1999 indicate total taxable income and gains after all deductions of £16.6 billion. For this period tax payable from all companies liable to tax, including those with income chargeable at the 10% rate or the standard rate of tax amounted to £2.5 billion, giving an average tax rate of 15%. The Deputy may also wish to note that the standard rate of corporation tax was 32% for the calendar year 1998 and 28% for the calendar year 1999, that is the relevant standard rates that applied during the accounting periods ending between April 1998 to March 1999. In addition, during this period a reduced rate of corporation tax of 25% applied on the first £50,000 of a company's income earned during the calendar year 1998 and on the first £100,000 of income earned during the calendar year 1999.
In relation to the specific case raised by the Deputy, I should point out that it is an established practice that a Minister for Finance does not answer a parliamentary question about the tax affairs of an individual or a company, other than when the Deputy asking the question was asking the question on behalf of the taxpayer. In this instance it would appear that the Deputy is not asking the question with the consent of the company concerned. In these circumstances, therefore, I regret that I must follow the advice of the Revenue Commissioners that the information sought should not be divulged on grounds of confidentiality.
