IDA chief defends Ireland’s corporation tax regime

IDA chief executive Barry O’Leary has defended Ireland’s corporation tax regime and insisted multi-national firms operating in the State are paying an adequate amount.

Speaking at the Public Accounts Committee today, Mr O'Leary said there had been a lot of controversy about the global tax environment, and not just the Irish one, and that IDA clients had paid some €2.7 billion in corporation tax last year.

Mr O’Leary said the overall figure equated to €19,000 per employee per year in corporation tax, which he felt was a “high burden”.

He said staff of multi-national firms earned an average of €43,000 annually compared to an average of €36,000 in domestic companies.

He said, on average, EU countries generated some 2.4 per cent of their GDP through corporation tax and that Ireland, with a headline rate of 12.5 per cent and effective rate of some 8.2 per cent, was above the average of 2.6 per cent.

He stressed the effective amount of tax paid by firms in Ireland was far closer to the headline rate than in many competitor nations.

Asked by Independent TD Shane Ross if some companies, such as Apple, had "sweetheart deals" when it came to taxation in Ireland, Mr O'Leary replied this was not the case but that he would not comment on the arrangements of individual companies.

Earlier this year US senators John McCain and Carl Levin alleged at a US Senate finance committee that Apple only paid tax at a rate of some 2 per cent in Ireland.

“There was no sweetheart deal for Apple,” Mr O’Leary said. “It was a comment that shouldn’t have been made and it was retracted.”

He insisted Ireland did not do deals because the transparency and consistency of Ireland’s corporation tax regime was winning the State more business than many of its competitors.