Rise in corporate tax 'no bar' to investors
IRELAND COULD absorb an increase of 3 per cent to 4 per cent in its corporation tax while maintaining its attractiveness to investors, members of Integra International, the global association of independent accounting and financial consulting firms, have said.
A survey of Integra International members by Irish chartered accountants and recovery firm Hughes Blake found more than 70 per cent of global business advisers would recommend Ireland as a location for direct foreign investment.
US certified public accountant and former chairman of Integra International, Donald DeGrazia, said: “If corporate tax was 25 to 30 per cent it would have a big impact on those considering investing in Ireland. However, if it was increased to 15 or 16 per cent Ireland would still be competitive, and thus attractive.” Companies are taxed at more than 40 per cent in the United States, so Ireland’s tax rate of 12.5 per cent is a huge attraction for US firms, he said.
Francisco Bellavista Arimany, economist and managing director of Barcelona-based firm Bellavista Legal, said Ireland needed to make a commitment to maintaining its low corporation tax if it was to increase its attractiveness.
“Companies may not spend huge amounts of money investing in Ireland if they think the corporation tax may be raised in the near future,” he said.
Some 55.6 per cent of those surveyed said they did not believe Ireland’s reputation suffered more in the recession than those of other countries.
Tetsunori Chiba, international tax partner at Actus Tax Corporation in Japan, said many Japanese firms were looking to invest in Ireland due to its proximity to European markets and the low tax rate.
Neil Hughes, managing partner at Hughes Blake, said the survey showed sentiment towards Ireland was not as negative “as we might think”.