Harney Says Nice Treaty Will Protect Ireland's Corporate Tax Rate

by Jason Gorringe, Tax-News.com, London

16 September 2002

Speaking on Thursday, Tanaiste Mary Harney dismissed as 'completely wrong' claims by anti-Nice campaigners that acceptance of the treaty would interfere with Ireland's ability to levy low corporate taxes.

Launching the 'IFSC for Yes' campaign, Ms Harney reiterated the importance of the 12.5% corporate tax rate in attracting investment to the country, and in particular to the international financial services centre (IFSC).

'The agreement we negotiated at Nice that national governments continue to set their own corporation tax rates remains very important for IFSC jobs and for Ireland,' she told those attending the launch, adding that: 'I agree wholeheartedly that a Yes vote will secure that agreement and that a No vote could undermine it.'

She went on to soothe fears over tax harmonisation within the European Union, explaining that: 'Tax harmonisation cannot be imposed on Ireland through enhanced cooperation of some EU member states. If some countries harmonise at higher rates, there's no issue for us. And it is unlikely they will go lower than our 12.5% rate.'

The Tanaiste concluded: 'Even if they did, Ireland would still decide the rate that would apply here.'

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