Dáil Éireann Debate, Tuesday - 22 September 2020
271. Deputy Richard Boyd Barrett asked the Minister for Finance the estimated amount of tax revenue which would be generated by applying a 12.5% minimum effective tax rate on total gross profits before deductions, allowances or reliefs. [25594/20]
Amharc ar fhreagraCompanies in Ireland are mainly taxed at the standard corporation tax rate of 12.5 per cent. The higher corporation tax rate of 25 per cent applies to certain income of companies, mainly non-trading income. Additionally, a rate of 33 per cent applies to capital gains. There are different figures and methodologies used to calculate effective tax rates paid by companies in Ireland. While some of these percentages are lower than the 12.5 per cent headline rate, this can be attributed to the availability of a small number of tax reliefs, such as the Research and Development Tax Credit, available in Ireland that may lower the effective rate of corporation tax paid.
An analysis by Revenue of corporation tax paid by companies in 2018 estimates that the effective rate of tax paid by all companies in Ireland in that year, after taking account of tax reliefs, was 10.6 per cent, and 11.3 per cent and 10.8 per cent respectively for the top 10 and top 100 companies.
It is not possible to accurately estimate any potential yield or cost in Corporation Tax receipts from the proposal set out in the Deputy’s Question because it is not possible to predict any behavioural change in response by the large, multinational companies who are responsible for around 80% of Corporation Tax receipts. Additionally, some companies who have non-trading income taxed at 25% or capital gains taxed at 33% may not see any increase in Corporation Tax payable.
