IDA welcomes Minister's pledge on corporation tax

IDA IRELAND has welcomed an assurance by Minister for Finance Brian Lenihan that the Republic’s corporation tax rate will remain at 12.5 per cent.

Speaking at an Irish Taxation Institute and Revenue Commissioners conference in Kilkenny yesterday, Barry O’Leary, the chief executive of the IDA, said the stability that the low corporation tax rate offered had been and would remain an important advantage for the organisation in its attempt to attract foreign direct investment (FDI) to Ireland.

“The tax system is open and transparent and the 12.5 per cent tax rate is available to all investors unlike the situation in other jurisdictions,” Mr O’Leary said.

“IDA Ireland and the Irish Revenue have always targeted substance in any multinational corporations coming to invest in Ireland.”

Mr O’Leary said he did not understand why commentators sometimes referred to Ireland as a tax haven.

“Given the openness of Ireland’s tax regime, the substance associated with FDI investments, the number of bi-lateral agreements with other countries, and the fact that the OECD has never suggested at any time that Ireland was a tax haven, it is difficult to understand how some of these preconceptions arose or could be sustained.”

A number of British companies have relocated their corporate headquarters to Ireland over the past year in order to benefit from lower taxation, prompting British Liberal Democrat treasury spokesman Lord Matthew Oakeshott to dub the Irish capital “Liechtenstein on the Liffey”.