Throughout the current economic crisis, the Irish Government has consistently reiterated, in the teeth of some muted, and not so muted, criticism from foreign commentators, that the rate of Irish corporation tax on trading profits will remain at 12.5%.
The National Recovery Plan 2011-2014, which was published by the Irish Government on Wednesday, 24 November 2010, commits to this position:
"The Irish Government’s position on corporation tax is unambiguous. The Programme for Government clearly states that the Government guarantees that the 12.5% rate of corporation tax will remain. Nothing is changed by this Plan. That commitment is protected, in an EU context, by the principle of unanimity in taxation matters.
While taxation has to play a part in restoring balance to our public finances, this will not apply to our corporation tax rate. A low rate of corporation tax on export-orientated activity has been a cornerstone of our industrial policy since the 1950s and the 12.5% rate is now part of our international ‘brand’. The contribution from the corporate sector will be made through the maintenance and creation of high value employment."
We have received many calls and emails from clients and friends over the past few weeks expressing concern with regard to the Irish corporation tax rate. As you can see from the above extract, the position of the Irish Government remains clear.