Dáil Éireann Debate, Tuesday - 15 October 2019
147. Deputy Peadar Tóibín asked the Minister for Finance the effective rate of corporation tax that has been charged to companies here in the past year; the effective rate of corporation tax that has been charged to indigenous businesses in the past year; and the effective rate of corporation tax that has been charged to foreign direct investment companies in the past year. [42026/19]
Amharc ar fhreagraI am aware that on the matter of the effective corporate tax rate paid by corporations in Ireland, there have been seemingly conflicting figures and methodologies used in reference to Ireland. I would advise the Deputy that significant work has been undertaken on this matter by my own Department, by Revenue and by others.
I am advised by Revenue that the effective rate of Corporation Tax for all companies is set out on page 19 of its report on ‘Corporation Tax 2018 Payments and 2017 Tax Returns’ which is available on the Revenue website at link https://www.revenue.ie/en/corporate/information-about-revenue/research/research-reports/corporation-tax-and-international.aspx.
This paper shows that for the year 2017, the latest year available, the effective rate of Corporation Tax on aggregate net taxable profits, after taking account of various deductions, allowances, charges and reliefs was 10.2 per cent, an increase on the 10 per cent figure recorded for 2016.
The effective tax rate on taxable income, calculated on tax returns filed by foreign owned multinational companies for 2017, is 10.7%. The effective tax rate on taxable income for all other companies for 2017 is 8.6%.
Analysis of effective rates of Corporation Tax for 2018 will be made available in 2020 when all returns for 2018 have been filed and analysed.
The Deputy will also be aware of an analysis undertaken by my Department in 2014, co-authored by Mr Seamus Coffey as an independent academic, which confirmed that the overall effective rate of corporation tax, using the most appropriate methodology, paid by corporations in Ireland is between 10% and 11%.
While these percentages are lower than the 12.5% headline rate, this can be attributed to the availability of the small number of targeted tax measures, such as the Research and Development Tax Credit, available in Ireland that may lower the effective rate of corporation tax paid in Ireland.
