Irish CIT Rate 'Non-Negotiable'

by Jason Gorringe, Tax-News.com, London

22 November 2010

As Ireland is placed under pressure by its European neighbours, Batt O’Keeffe, the Irish Minister for Enterprise, Trade and Innovation has resolutely underscored that the country's 12.5% corporate tax rate "is not up for negotiation."

In a statement on November 18, O’Keeffe said:

“Our 12.5% corporation tax rate is a vital draw for foreign direct investment (FDI) and it remains a key component of our industrial policy.”

“It is an aspect of taxation on which the government is not for turning and it is vital that we keeping hammering that message home to the international investor community.”

According to the Irish government, FDI generates more jobs per head of population in Ireland than in any other country and foreign firms support some 240,000 Irish jobs.

FDI to Ireland underpins 50% of Ireland’s corporation tax take, 70% of national exports and a EUR19bn spend in the economy, including GBP7bn in payroll.

“Internationally, FDI was down 30% last year but in Ireland it fell by just 4%,” O’Keeffe further stated. “Our economic recovery will be driven by sustainable economic export-led growth,” the Minister concluded.

Investors have feared that Ireland will be forced to concede its corporation tax rate as a precondition to the provision of external financing from the European Union, the International Monetary Fund, and the European Central Bank.

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