As Brexit storm clouds gather, Ireland’s coveted 12.5pc tax rate will be sustainable up to 2020 and beyond.
In the face of incessant attacks from jealous European neighbours and the implied threat of tax reform in the US, it was made clear in Budget 2018 that Ireland is holding firm to its 12.5pc corporate tax rate.
The Minister for Finance and Minister for Public Expenditure and Reform Paschal Donohoe, TD, reiterated the Government’s commitment to the 12.5pc corporation tax rate which is a “core part of our offering”.
‘With so much change ahead, Ireland must compete, not only on the rate but on the ability to offer certainty’
– PASCHAL DONOHOE, TD
He also stressed Ireland’s “stable and competitive corporation tax system, which is internationally recognised as one of the most transparent in the world”.
Certainty for FDI investors
“Our position is clear,” Donohoe said.
“The 12.5pc tax rate is, and will remain, a core part of our offering. I also recognise the importance of stability.
“With so much change ahead, Ireland must compete, not only on the rate but on the ability to offer certainty.”
Donohoe referenced the Seamus Coffey report, which set out a roadmap for Ireland to implement a range of reforms up to the end of 2020 and recommended the need for consultation.
As a result, he is launching a public consultation process as part of the Update on International Tax Strategy.
“Mr Coffey carefully examined the sustainability of our corporation tax receipts. His advice is that the level shift in corporation tax receipts seen in 2015 can be expected to be sustainable up to 2020.
“In order to ensure some smoothing of corporation tax revenues over time, the report recommended that the limitation on the quantum of relevant income, against which capital allowances for intangible assets and any related interest expense may be deducted in a tax year, be reduced to 80pc.
“I intend to make this change in respect of expenditure incurred by a company on intangible assets from midnight tonight,” Donohoe said yesterday (10 October).