Accountancy firm Arthur Andersen has been ranked the leading Irish tax advisory firm in the fourth annual International Tax Review survey. Arthur Andersen was followed by Coopers and Lybrand, KPMG and Price Waterhouse.

The leading Irish tax adviser was Mr Mike Farrell of Arthur Andersen. He was followed by Mr Pat O'Brien of KPMG, Mr Eamon O'Doherty of Ernst and Young and Mr Liam Quirke of Matheson Ormsby Prentice.

The survey of leading European tax advisers was compiled from responses to questionnaires sent to readers of International Tax Review, which is published by Euromoney Publications. The response rate varied between 30 per cent and 40 per cent. Readers were asked to select the four tax firms which gave the best tax advice, to name the leading tax advisers and to nominate the two best firms in 10 areas of specialisation. In Ireland, demand for tax advisers outstrips supply, pushed by a strong economy and the 10 per cent tax regime which encourages international companies to set up operations here.

"The flow of inward investment has never been stronger and interest in Ireland as an international services and manufacturing centre has never been greater," according to Mr Pat Wall, a tax adviser with Coopers and Lybrand.

Recruitment of additional expertise has become a "pressing priority" for Irish firms. Matheson Ormbsy Prentice has doubled its size over the survey period, appointing a new partner and three tax associates. Leading tax adviser Mr Farrell said booming demand had meant his firm's tax department was significantly understaffed at partner and senior manager level. The positive side of this was that "personnel below these levels are well aware that their potential for advancement within the firm is significant". Traditionally, accountancy firms have been the main providers of tax advice in Ireland. But some law firms are challenging this tradition, according to KPMG adviser, Mr Pat O'Brien. "An area in which law firms have been traditionally strong is that of stamp duty advice, but in recent years the law firms have begun to develop their resources on other tax areas, reflecting, no doubt, developments in other jurisdictions."