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Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

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12.5% Corporation Tax Rate

Unhelpful suggestions that the Corporation Tax rate is under threat have been completely dismissed by the Department of Finance and the Finance Spokespersons from the major opposition parties. Chartered Accountants Ireland has corresponded directly with the Minister, Mr Noonan and Ms Burton to emphasise the importance of the rate to Irish business and Foreign Direct Investment.

Between these correspondences and discussions held directly with the EU Commissioner for Taxation, it is clear that there is no threat to the 12.5% tax rate in Ireland, and that this will not be a matter for political horse-trading among the main parties after the next election.

The Minister's department pointed towards a recent statement by Minister Lenihan:

  • “With regards the corporation tax rate, the Government has always made it clear that the corporation tax rate will remain at 12.5% as set out in the Programme for Government. This is still the case. This commitment is protected, in an EU context, by the principle of unanimity in taxation matters. That was further enhanced by the insertion of a legal guarantee in the Lisbon Treaty. The 12.5% corporation rate is a cornerstone of the Irish industrial policy.”

Mr Michael Noonan of Fine Gael wrote to us to state:

  • “All parties in the Dáil are committed to retaining the 12.5% Corporation Tax Rate”. Mr Noonan also mentioned that his party leader, Deputy Kenny had publicly committed the party to this policy.

In her response, Ms Joan Burton of Labour stated:

  • “Maintaining this attractive rate has since been a cornerstone of Labour's and successive government's industrial policy. Given the economic difficulties we face, and the need to create and retain jobs, it is critical that every effort be made to maintain and enhance Ireland's attractiveness as a destination for inward investment.”

These statements are clear and unambiguous, and address the request by Tax Committee South Chairman Liam Lynch that our politicians take every opportunity to restate their commitment to the 12.5% rate. We hope they will be of assistance to you if you have to deal with any concerns expressed by clients or colleagues regarding Irish tax policy.