Government vows to withstand pressure over tax code

Bruton insists country’s 12.5% corporation tax rate will remain bedrock of economic policy

Minister for Jobs, Enterprise and Innovation Richard Bruton has said the Government would stand firm against international pressure to change its tax code. Photo: PA Wire

Minister for Jobs, Enterprise and Innovation Richard Bruton has said the Government would stand firm against international pressure to change its tax code. Photo: PA Wire

Wed, Jul 30, 2014, 14:34

Minister for Jobs Richard Bruton today insisted the Government would stand firm against international pressure to change its tax code.

Mr Bruton said the country’s 12.5 per cent corporation tax rate had been and would remain a “bedrock” of the State’s economic policy.

He was speaking at the launch of a strategy document on foreign direct investment (FDI), which suggests a new phase in the campaign to attract FDI is required as other countries had copied the Irish model.

One of the key elements of the plan is a commitment to retaining the 12.5 per cent corporation tax rate, allied to support for multinational reform of the international tax system.

Mr Bruton noted that the Government had vehemently defended its tax code at the height of the financial crisis in 2010 and 2011, when it was at the mercy of international creditors.

“Europe has recognised that competing on taxes is here to stay.”

Echoing recent comments by Minister for Finance Michael Noonan, Mr Bruton said Ireland will compete under fair rules but “we will compete to win.”

“I think what’s now happening through various multinational processes, we’re looking to make sure that companies can’t aggressively exploit the gaps between different codes,” Mr Bruton said.

The OECD is looking at closing tax loopholes which allow some companies to legally pay little or no tax by exploiting disparities between national tax regimes.

Last week, US president Barack Obama criticised companies for “gaming the system” by relocating their headquarters to countries such as Ireland to avoid the paying taxies in the US, a phenomenon known as tax inversion.

Mr Bruton said Ireland did not promote or favour tax inversion deals and would support US efforts to clampdown on the issue.

The Government’s policy document, published today, focus on creating more than 7,000 net jobs a year from FDI between 2015 and 2020.

It suggests the next phase of the campaign must be based on portraying Ireland as a great place to live, allied to talent, technology and the development of new sectors.

Mr Bruton asked the IDA to prepare a new strategy for the five years to 2020 outlining a series of targets for jobs, investments and the regions and how they will be delivered.