Dáil Éireann Debate, Wednesday - 15 June 2016
82. Deputy Bernard J. Durkan asked the Minister for Finance his plans to ensure the protection of jobs and job opportunities through a 12.5% corporation profit tax or equivalent; and if he will make a statement on the matter. [16319/16]
View answerAt 12.5%, Ireland has one of the most competitive headline corporate tax rates in the OECD. This rate is applied to a broad base, a policy which is endorsed by the likes of the OECD as it is good for growth in our economy.
Our competitive rate of corporation tax has been an important part of our industrial policy since the 1950s, and has attracted real and substantive operations to Ireland since then. Ireland has not been and will never be a brass-plate location. We only have and want real substantive FDI, the kind that brings real jobs and investment into Ireland.
In 2014 the Department of Finance published the Economic Impact Assessment of Ireland's Corporation Tax Policy. This contained the results of extensive research which was carried out and commissioned by the Department of Finance which sought to quantify the effect of corporation tax policy on the Irish economy.
As part of this project, the Economic and Social Research Institute ('ESRI') were commissioned to carry out a study into the impact that the corporation tax rate has on the decision of firms to invest in Ireland. This independent research found if the rate had been higher over the period of their sample then the number of new foreign investments into Ireland would have been lower.
Another paper, titled Literature Review of the Economic impacts of Corporation Tax highlighted research by the OECD and others that point to the importance of low corporate tax rates to encourage economic growth.
The maintenance of the standard 12.5% rate of corporation tax is therefore extremely important for Ireland's economy. Ireland, like other smaller member states, is geographically and historically a peripheral country in Europe. A competitive corporate tax rate is a tool to address the economic limitations that come with being a peripheral country, as compared to larger core countries. Ireland's 12.5% corporation tax rate plays an important role in attracting FDI to Ireland and thereby increasing employment here.
This evidence underpins the Government's continued commitment to the 12.5% rate.
