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Irish Tax Policies Secure Increasing Inward Investment

by Jason Gorringe,, London

07 January 2015

Ireland's investment promotion agency, IDA Ireland, has said that changes to the country's corporation tax rules during 2014 enhanced Ireland's international competitiveness, as demonstrated by new inward investment statistics.

IDA Ireland reported the creation of 15,012 new jobs by IDA client companies during 2014. The net increase in employment was 7,131, one of the highest levels in the past decade. Total employment in IDA companies now stands at 174,488, the highest level in the agency's history.

In its new report, the agency stated that the Budget 2015 changes introduced by Finance Minister Michael Noonan "position the country to sustain, and win, inward investment in the years ahead and further strengthen what Ireland can offer overseas investors."

In particular, the IDA welcomed "pro-active" reforms to Ireland's tax residency rules. As of January 1, 2015, all new companies that are incorporated in Ireland are automatically tax resident in Ireland. For existing businesses, the amended rules will come into effect from 2020.

According to IDA Ireland, the move provides greater clarity for companies operating in Ireland or seeking to invest in Ireland for the first time. It has also "confirmed Ireland's international reputation as a country with a stable, transparent, and fair taxation regime, by bringing clarity to how Ireland's tax rules interact with tax regimes present elsewhere."

In addition, the IDA was pleased with measures to introduce a "best in class" knowledge development box, broaden the research and development tax credit, and improve the Special Assignee Relief Programme.

"The Irish corporate tax proposition is firmly built around having economic substance, in terms of employees, payroll, and capital investment, and as a result any changes being considered internationally should benefit Ireland, not threaten Ireland's current portfolio," the report concluded.

Jobs Minister Richard Bruton commented: "Foreign direct investment is a central part of our Action Plan for Jobs. Multinational companies account for almost ten percent of the Irish workforce and are of crucial strategic importance for the economy due to the quality of the jobs involved, their export focus, and the massive knock-on impact they have on the wider economy."

"That is why we have put in place a range of new measures to support extra jobs in this area over the past four years, such as extra IDA staff in foreign markets, increased skilled graduates, and an improved tax offering."

TAGS: compliance | Finance | tax | investment | business | tax compliance | Ireland | foreign direct investment (FDI) | employees | corporation tax | payroll | tax credits | multinationals | tax reform | research and development | Investment | Invest | Investment

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