Dáil Éireann Debate, Tuesday - 17 May 2016
1177. Deputy Bernard J. Durkan asked the Minister for Jobs, Enterprise and Innovation if Ireland will remain equally attractive for foreign direct investment and indigenous job creation, having particular regard to provisions made in budget 2016 and the potential of the Irish knowledge development box or any other issues in the wake of changes to the 12.5% corporation tax rate; and if she will make a statement on the matter. [9768/16]
View answerThe Action Plan for Jobs process set out to rebuild our economy based on enterprise and entrepreneurship. The co-ordinated response across all of Government has made significant progress in helping to create jobs and to reduce unemployment across the economy.
There are now 1,929,500 people in employment, an increase of 41,300 people at work over the past year (CSO QNHS Q1 2016). Our enterprise development agencies have each reported a record performance in 2015, with IDA Ireland supporting the creation of 18,983 direct new jobs (11,833 net), and Enterprise Ireland supporting the creation of 21,118 new jobs (10,169 net).
The Knowledge Development Box (KDB), introduced in Budget 2016 forms part of Ireland’s competitive offering to continue to attract FDI and to support Irish owned companies to innovate and to compete effectively on international markets.
The continuing imperative to establish Ireland as the best place in which to succeed in business is reinforced in our national Enterprise and Innovation strategies. Our aim is that Ireland will be recognised as the place where businesses are innovative, competitive and productive – leading to growth that is sustainable and results in employment opportunities and a higher standard of living for all. These strategies set out the framework for investment over the coming decade to ensure that Ireland remains equally attractive to foreign direct investment and to Irish entrepreneurs and growth businesses in the context of an intensely competitive international environment.
The KDB complements the existing suite of initiatives and supports available to companies that undertake R and D activities in Ireland across the lifecycle of research and development – including R and D tax credits, RD and I grant supports, support for technology acquisition (S291A), significant state investments in National Research Centres and knowledge transfer infrastructures, and advisory supports for accessing Horizon 2020 funding – providing a competitive proposition for business investment.
Ireland is the first country world-wide to introduce an OECD compliant KDB offering. The certainty, predictability and clear signal that this sends to enterprise – including both Irish owned and foreign owned entities establishing and doing business from here - remains essential. The OECD nexus approach sets out the principles and guidelines under which income arising from IP assets can qualify for a lower rate of tax under a KDB initiative. Ireland’s KDB rate is 6.25 percent (half of the corporation tax rate of 12.5 percent) and is internationally competitive.
It is important to reinforce that Ireland’s commitment to its 12.5 percent corporate tax rate is clear and that there are no changes to our 12.5 percent corporate tax rate. As set out in the roadmap for Ireland’s Tax competitiveness, Ireland will continue to structure its corporation tax system on the basis of:
- Rate: Ireland remains totally committed to the 12.5 percent corporation tax rate;
- Regime: A system that is open, transparent, predictable and built upon substance; and
- Reputation: a system that plays by the rules
Our competitive offering in relation to corporate tax will be complemented by key non-tax related differentiators in terms of skills and talent, innovation and quality of place.
