Medium-sized businesses do well under Irish tax regime

Thu, Nov 22, 2012, 00:00

The tax environment for medium-sized companies in Ireland is the sixth best in the world, according to a study by the World Bank, International Finance Corporation and auditing and consulting firm PwC.

The ranking – based on the total amount of tax paid, number of taxes and compliance burden – is the same as in 2008, when the recession began, but is down from fifth last year.

The Paying Taxes 2013 study looks at tax regimes in 185 economies and measures all mandatory taxes and contributions that medium-sized firms pay in a given year.

The study finds that in Ireland they pay 26.4 per cent of their profits in taxes. Worldwide, medium-sized companies in only 29 countries, mostly in the developing world, paid less tax. In the EU, only in Luxembourg and Cyprus do medium companies pay less tax.

In the UK and the Netherlands, the report finds they pay 35.5 per cent and 40.3 per cent of their profits in taxes respectively. In Germany they pay 46.8 per cent and in France they pay 65.7 per cent.

Irish medium firms spend 80 hours annually on administrative work associated with paying all kinds of taxes. Among EU countries, the burden of compliance was lower only in Luxembourg.