Tuesday, 2 July 2013

Questions (199, 201)

Micheál Martin

Question:

199. Deputy Micheál Martin asked the Minister for Finance if he is concerned about the rate of corporation tax here within the EU; and if he will make a statement on the matter. [25194/13]

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Micheál Martin

Question:

201. Deputy Micheál Martin asked the Minister for Finance if Prime Minister Cameron has expressed concerns to him regarding tax structures of global companies here; and if he will make a statement on the matter. [25196/13]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 199 and 201 together.

On the question about contacts from Prime Minister Cameron regarding the tax structures of global companies here I can inform the Deputy that there has been no contact from Prime Minister Cameron regarding the tax structures of global companies here. The Government has consistently stated its commitment to the 12.5% corporation tax rate which has the support of all the major parties and the majority of Deputies in this House. We have a very strong track record of attracting companies of real substance to invest and create thousands of jobs in Ireland. Many of the large Multi-National Corporations, MNCs, are here for many years and regard Ireland as an excellent base from which to serve their customers in Europe and further afield. Our competitive taxation system is just one element of what makes Ireland attractive to MNCs. We remain committed to our competitive 12.5% tax rate and I have no concerns whatsoever regarding Ireland's ability to maintain this rate.

In addition a low corporate tax rate is a tool to address the economic limitations that come with being a peripheral country, as compared to “core” countries. Furthermore taxation is a powerful instrument of economic policy. Retaining the right of EU Member States to decide taxation rules and levels allows Member States to take account of their differing positions in the economic and business cycle. Therefore taxation may also be used as a tool to stimulate the economy or to cool it down in case of risks of overheating. However, it is important to make a distinction between a competitive tax economy and harmful tax competition. Ireland is does not engage in harmful tax competition. Ireland just like other EU countries believes in fair tax competition and building on the work of the Global Forum on Tax Transparency, unfair tax competition is an issue that needs to be examined.