Ireland’s corporate tax not under threat, OECD tax chief says

Pascal Saint-Amans says the variation in national rates was no longer questioned

Minister for Finance Michael Noonan: “There’s a lot of concern in the city of London, and there is a great interest in Ireland as a location for the financial services industry.” Photograph: Dara Mac Dónaill

Minister for Finance Michael Noonan: “There’s a lot of concern in the city of London, and there is a great interest in Ireland as a location for the financial services industry.” Photograph: Dara Mac Dónaill

 

Ireland’s 12. 5 per cent corporate tax rate is not under threat from moves to reform the global tax system, the OECD’s tax policy chief has said.

On a visit to Dublin, Pascal Saint-Amans said there was no longer any questioning of the rates set by some countries.

He said the OECD’s base erosion and profit shifting project – better known as Beps – was about aligning profits with economic activity and did not have a direct bearing on national taxation rates.

“There is no questioning of the rates taken by some countries,” said Mr Saint-Amans, director of the OECD’s Center for Tax Policy and Administration. “Clearly the US is much too high but I cannot say that Ireland is too low; it’s not. It’s accepted, even the French have understood that Ireland will not change its tax rate. It’s here and it’s perfectly fine.”

Mr Saint-Amans earlier met Minister for Finance Michael Noonan to exchange views on the Beps reform agenda. He said Ireland had been “extremely supportive and active” in seeking ways to resolve the issues of double non-taxation and aggressive tax planning by multinationals and stood to gain from the reforms.

No contradiction

Mr Saint-Amans also said he did not see a contradiction between Ireland’s stance in opposing the commission’s €13 billion tax ruling against Apple and its support for Beps. He said the commission’s decision related to previous tax arrangements while the focus of Beps was on how profits should be taxed in the future.

Earlier, Minister Noonan said Ireland’s 12.5 per cent corporate tax rate will remain in place despite recent controversy surrounding so-called tax breaks for US computer giant Apple.

Speaking at a jobs announcement by US company WP Engine, which is to create 100 online technological jobs in his native Limerick, Mr Noonan said Brussels could not force Ireland to change any of its tax rates.

“We’re under no pressure. The European Commission acknowledges the right to set tax rates is a matter for sovereign governments. It’s not a competence of Europe or the European Commission, so there’s no pressure [from Europe] on us.”

Mr Noonan said the 12.5 per cent rate could nearly be put on the Tricolour now, “because everybody knows internationally that the rate is 12.5 per cent”.

“Actually, when industrialists think of Ireland, they automatically think of 12.5 per cent. But, just in case there is any doubt about it, I’ll confirm it again in this year’s budget.”

Ahead of budget day on October 11th, Mr Noonan said that, while he would announce a raft of incentives for first-time home buyers, the “big issue” was to get agreement across all Ministers.