CORPORATION TAX:IRELAND'S MUCH-PRIZED 12.5 per cent corporation tax rate appears to be safe for the duration of the joint EU/International Monetary Fund (IMF) support programme, which will last 10 years.
At a press conference yesterday, Taoiseach Brian Cowen said the deal “does not involve any change to our corporate tax rate of 12.5 per cent”.
He said this would help secure existing foreign investment in Ireland and help create new jobs.
At a subsequent media briefing, in response to a question from The Irish Times, Ajai Chopra, who led the IMF’s delegation in talks with the Government, said, “A very simple answer to the corporate tax rate is that it is not a part of the programme.” But Mr Chopra later said spending and tax issues would form part of its annual review of Ireland’s compliance with its programme. This suggests the door is still ajar in relation to our corporate tax rate over the next decade.
Danny McCoy, director general of employer group Ibec, said the deal provides “much-needed certainty” for our public finances.
Mark Redmond, chief executive of the Irish Taxation Institute, said “Our commitment to the 12.5 per cent tax rate is absolutely crucial.”
He noted that, in 2008, US multinationals paid €5 billion to the exchequer.