Our Corporate tax rate - EU Comparisons & it's likely future.

[horusd]

Interesting article about this today from Colm Keena, Irish Times.

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In Germany the actual rate paid is 22.9 per cent and in the UK it is 23.2 per cent. President Nicolas Sarkozy has made clear his dislike of Ireland’s low corporation tax rate but his country’s effective tax rate for corporates is an amazingly low 8.2 per cent – below the Irish level. Earlier this month, an unnamed Irish official said that “based on our information, 25 per cent of all French companies did not pay any corporate tax in 2009”.
The Irish effective tax rate, at 11.9 per cent, is very close to its actual rate. This reflects Ireland’s desire to make its corporate tax regime as simple as possible, again so as to attract foreign direct investment. We do not have the range of write-offs other countries do.

*My highlights.

France and Germany want to see Ireland increase its rate. At a time when they are being asked to stump up money to assist Ireland and other peripheral member states, there is an understandable feeling that Ireland should raise more tax.

“If you think about it, you don’t see very many French or German companies running large-scale operations out of Ireland,” says Tynan. “The companies you see here are US companies using Ireland as a gateway. If we push up the rate, I think the investment will go to Switzerland, not to France or Germany.”

The pressure on Ireland’s corporation tax rate comes at a time when we are particularly exposed, given our dependence on financial aid from Europe.

Nevertheless she adds, we can refuse and the Baltic States and the UK are potential allies. Tynan’s guess is that ultimately Ireland will retain its rate.

Looks like we're not out of the woods on this yet, but there is some solid arguments for it's defence.