There is no agreed international methodology for calculating the ‘effective rate’ of corporation tax. With that in mind, I am unsure as to the premise of the Deputy’s question. Companies operating in Ireland are chargeable to corporation tax at the 12.5% rate on the profits that are generated from their trading activities here. A higher 25% rate applies in respect of investment, rental and other non-trading profits, as well as certain petroleum, mining and land dealing activities, while chargeable capital gains are taxable at the capital gains tax rate of 33%. I am not aware of companies having issues with complying with these corporate tax rates.
Unlike some other countries who have a high headline rate of corporation tax but also have a significant number of reliefs, the approach in Ireland is transparent. We have a relatively low headline rate of corporation tax which is applied to a broad base and there are only a small number of targeted incentives in Ireland. Such reliefs include, for example, the R&D tax credit and the 3 year exemption from corporation tax for start-up companies. These few reliefs are tightly focussed: firstly on the creation of additional employment as is consistent with current Government policy, and secondly on areas of innovation with a view to generating high value-added economic activity in the country.
In relation to the compliance burden arising from taxation more generally, the Deputy may be interested to note that Ireland was ranked 6th in the world and 1st in the EU for ease of paying taxes in a report published in April by PwC, the World Bank and the IFC entitled 'Paying Taxes 2013’.
