Bruton defends corporation tax system
Minister for Enterprise Richard Bruton has defended Ireland’s corporation tax system, saying there are no “special deals or cosy arrangements” in place with companies investing or operating in the State.
Speaking as the IDA released figures showing the net number of jobs generated through foreign direct investment reached its highest level in a decade last year, Mr Bruton said it would be “misplaced” to apply the same scrutiny to tax regimes in Ireland as has recently been done in France and the UK.
“International evidence shows the effective tax rate in Ireland is 11.9 per cent, very close to the nominal rate of 12.5 per cent,” he said.
“There are no special deals or cosy arrangements being made. Different countries choose to have different rates of tax, but ours is not one that could be in any way described as harmful in the way it is put together. It is an open and transparent system.”
Mr Bruton said commentators should look elsewhere in Europe to find “roll-you-own tax arrangements” as Ireland’s were in accordance with OECD guidelines on taxation.
“Lots of people have criticised it because they don’t like what we do, but it has always been clear that it does not breach any rules in terms of harmful tax competition.”
The IDA, in its end of year review, said a net gain of 6,570 jobs was recorded in the foreign direct investment sector last year. A total of 12,722 jobs were filled by companies investing in the State, but 6,152 workers were let go by multi-nationals in the same period.
Some 145 firms – among them Apple, EA Games, Allergan and PayPal – announced investments in the State last year.
The total number of people employed in multi-national firms increased to 152,785 at the end of last year. The total has almost recovered to the pre-financial crisis level of some 156,000, having fallen below 140,000 in 2009.
IDA chief executive Barry O’Leary said helping clients to transform their operations within Ireland had also helped to reduce job losses, created by foreign direct investment, to their lowest point in a decade.
He attributed the improved job-creation figures to the IDA taking a targeted approach to attracting companies in five key areas – IT, social and digital media, international financial services, pharmaceuticals and medical device manufacture.
Mr O’Leary said competition for investment was fierce from markets such as the Netherlands, Switzerland and the UK. However, he was hopeful a similar net jobs gain could be recorded in 2013, and the IDA hoped to continue to exceed the targets set out in its Horizon 2020 strategy.
Under the strategy the IDA committed to creating 62,000 jobs through foreign direct investment between 2010 and 2014. It said a gross of 36,650 jobs had been delivered over the last three years, some 7,000 ahead of target.
“There are opportunities for growth in the IT and technology sector, in specific areas of financial services, in life sciences, in social and digital media and in sectors where consolidation is taking place on a pan-European basis,” Mr O’Leary said.
Mr Bruton said the figures were “a superb vote of confidence” in Ireland’s economy and people.
Asked if raising taxes on high-earners would deter investment, he said the Government was conscious of the issue.