Dáil Éireann Debate, Wednesday - 17 April 2019
96. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he expects to be in a position to defend the 12.5% corporation tax and dispel the misinformation propagated by certain persons; and if he will make a statement on the matter. [18033/19]
View answerIreland’s corporation tax regime is a core part of our economic policy mix and is a longstanding anchor of our offering on foreign direct investment (‘FDI’).
At 12.5%, Ireland has one of the most competitive headline corporate tax rates in the OECD. This rate is applied to a broad base with limited deductions – a policy which is endorsed by the likes of the OECD as it is good for growth in our economy.
Our competitive corporation tax regime has been an important part of our industrial policy since the 1950s and has attracted real and substantive operations to Ireland since then, bringing real jobs and investment into Ireland.
The value of a stable and consistent approach to corporation tax policy, both for the business community and for the Exchequer, has long been recognised. The cornerstone of this policy is the long-term and continuing commitment to the 12.5% corporation tax rate.
Ireland has been criticised for the way in which our tax system has been used by multinationals in their aggressive tax planning structures to exploit mismatches between the tax systems of various countries and gaps in the international tax framework. In defending our domestic tax system I recognise the importance of ensuring effective taxation of multinational companies and the need for internationally agreed solutions to counter aggressive tax planning. For this reason Ireland has been, and continues to be, fully engaged with international efforts to counter aggressive tax planning, through both the OECD’s BEPS (Base Erosion and Profit Shifting) project and the co-ordinated action at EU level.
In September 2018, I published Ireland’s Corporation Tax Roadmap, marking another milestone in Ireland’s ongoing work on corporation tax reform. It lays out the next steps in implementing the various commitments we have made through the EU Anti-Tax Avoidance Directives, the BEPS reports and the recommendations set out in the Coffey Review of Ireland’s Corporation Tax Code.
Ireland continues to engage in the OECD on ongoing international tax reform and recognises that further change to the international tax framework is necessary. I am supportive of the further examination of proposals currently being discussed via the OECD Inclusive Framework and the aim of reaching a global consensus. In these discussions it is Ireland’s view that any changes must not disproportionately prejudice small open economies and any agreed outcome must be long-term, sustainable and above all fair.
In all of this we will continue to foster economic activity in Ireland, the EU and beyond by adapting and evolving our corporate tax regime, while maintaining our key 12.5% rate, and ensuring that we continue to have a regime that is transparent, sustainable and legitimate.
