Corporate tax announcement the right decision, at the right time
Ibec, the group that represents Irish business, has said that today’s announcement that Ireland would be joining the new international agreement on corporate tax reform is the right decision, at the right time.
Accession to the OECD accord may pose a competitiveness challenge but Ireland’s regime will retain the advantages of certainty on the most competitive rate possible, our existing track record of significant substantial activity and delivery, access to the single market for trade and talent and a business-friendly environment generally. By building on these strengths Ireland can continue to thrive.
Ibec CEO Danny McCoy said: “We had been fully supportive of the Government’s approach of consulting with stakeholders and waiting for further detail and clarity on key questions before making firm commitments concerning our direct investment regime for foreign and Irish headquartered companies. Today’s outcome with a firm commitment to a 15% minimum rate, and no more, is a vindication of the State’s position and will provide welcome certainty for small open economies. We also welcome proposals for Ireland to maintain its 12.5% regime for those companies not in scope of the agreement.
“Today marks a watershed for the Irish business model. Implementation of any changes must improve on the elements of the regime we control. The key advantage of Ireland’s tax regime will continue to be built on certainty, simplicity and maximising opportunity. Any change should be accompanied by reform on Ireland’s regime to maximise our competitiveness for substantial investment and activity, making full use of key supports like the R&D tax credit and dealing with existing complexities in the regime. Implementation of the new regime must also be cognisant of the final texts of both the OECD agreement and potential US legislation to ensure that Irish headquartered companies are not disadvantaged in their global operations.
“Ireland has experienced a significant change in the past, with changes to both the headline regime and to the base. The core reason we continued to thrive despite these changes was radical and concrete action by business and Government. We have been clear for several years that we will need to the competitiveness challenges which will flow from today’s decision by setting out clear medium-term policy commitments to improve our standing on other growth levers such as education, digital transformation, innovation, and talent.”