No guarantee Ireland will keep 12.5% corporate tax rate - Taoiseach

Martin says he will not be making commitments ‘one way or the other’ to companies

Taoiseach Micheál Martin with  New York governor Kathy Hochul  at their meeting in New York. Photograph: AP Photo/Seth Wenig

Taoiseach Micheál Martin with New York governor Kathy Hochul at their meeting in New York. Photograph: AP Photo/Seth Wenig

Your Web Browser may be out of date. If you are using Internet Explorer 9, 10 or 11 our Audio player will not work properly.
For a better experience use Google Chrome, Firefox or Microsoft Edge.

 

Taoiseach Micheál Martin has said he will not be making commitments to US companies “one way or the other” that Ireland will be keeping its 12.5 per cent corporate tax rate.

It comes as Ireland comes under pressure to sign up to an Organisation for Economic Co-operation and Development (OECD) plan for a global corporation tax rate of at least 15 per cent. Ireland is one of only a handful of countries holding out against the plans.

Mr Martin is in New York, where he is attending United Nations meetings and will also support the work of IDA Ireland, which is tasked with attracting inward investment into Ireland.

The 12.5 per cent rate has been a cornerstone of Ireland’s strategy to bring jobs to Ireland for decades.

Asked whether he will be telling US companies that Ireland is committed to the 12.5 per cent rate, Mr Martin said he would not be making commitments “one way or the other” to individual companies.

He later stressed that talks on the OECD deal are ongoing, and the next six weeks will be important in bringing those talks to a conclusion.

“We have issues with some of the text and where the agreement is at this stage but there’s further discussions under way,” he said at a joint press conference with New York governor Kathy Hochul.

He said the 12.5 per cent rate has been a “key part of our tax policy” but Ireland is engaging in the OECD process.

Mr Martin was asked on Bloomberg TV whether Ireland is committed to the 12.5 per cent corporation tax rate.

He said it was an important part of the “broader tools” used to attract companies into the country.

However, Mr Martin highlighted the “very critical” role of “human capital” in the success of tech and life sciences companies in Ireland.

He spoke of how Ireland has “built up a lot of strengths in that area” through its approach to migration and membership of the European Union.

He said: “We have a large talent pool of people that want to come to Ireland to live and work and enjoy a good quality of life. That’s very important to the Googles of this world, to the Amazons and the Apples.”

He said Ireland has engaged “constructively” in the OECD process and is “broadly supportive” of it, but “we haven’t joined the consensus yet”.

He said this was because of some aspects of it which “do not give certainty of continuity”.

He said companies require this and “there can’t be a scenario where it can change every two or three years, and that’s something that remains to be discussed within this process”.

Ms Hochul was asked whether she regarded Ireland as a tax haven, given that combined federal and state corporate taxes are more than 26 per cent in New York.

“Independent of a company’s calculation as to their tax advantages and disadvantages, we’ll see a tremendous synergy between American companies and places like Dublin,” she said. “Companies like Apple and Google and Facebook, companies that are in New York state, but also have their European headquarters in Ireland. So each company will make their own decision.”

Earlier, Minister for Finance Paschal Donohoe said Ireland may remain outside of the tax deal amid concerns about “deeply problematic” aspects of the plan to tax business profits around the world.

Despite this, European commissioner for economy Paolo Gentiloni, who was in Dublin on Monday for talks, said he is “quite confident” that a deal can be struck.

Speaking after their meeting, Mr Donohoe said he emphasised “that the ‘at least’ [referring to a corporation tax rate of at least 15 per cent] is deeply problematic for Ireland”.

Mr Donohoe said the State is “inside the process of the OECD, but we are not currently in the agreement. I emphasised the huge challenge and importance of this process to Ireland and how central the stability of corporate tax policy is to our economy.”

He warned that Ireland’s position may not change.

“I remain committed to seeing whether the process can yield an outcome that Ireland would be willing to consider joining. But equally, I have communicated to my colleagues that where we are at the moment – of not being in the agreement – is a position that could continue,” he said.

“I’m very clear that it is not appropriate for Ireland to be in the agreement. Now, that may continue to be the case. But equally, we are working very hard to see if an agreement is possible that would allow Ireland to join.”

The Government also wants clarity on whether the US Congress accepts the plan before deciding whether to move.

Mr Gentiloni said that it would be a “nonsense” to suggest that the US would not be centrally involved. “It is thanks to the United States that this global agreement . . . is now under discussion.”

Business Today

Get the latest business news and commentarySIGN UP HERE