Corporate Tax Rate in Ireland
Corporation Tax Rate in Ireland
The corporation tax rate in Ireland is extremely low compared to other European nations, which is used as an incentive to attract many multinational companies to Ireland. The impact this has on the Irish business environment is immense as it creates employment and opportunities for other businesses to be formed. Below I’m going to go into further detail and discuss what impact this could have on Irish Businesses if changes are made.
The corporation tax rate for Ireland is 12.5% which our government are determined not to change. The Irish government is coming under a lot of pressure from Europe to raise their rate. Most European nation’s tax rates are at an average of 40% which is not an attractive rate for multinationals to set up there. This has resulted in many of the biggest American multinational companies setting up their European headquarters in Ireland, which include such global giants as Google, Facebook and Twitter. Although there are other factors that have resulted in these companies setting up in Ireland the low corporation tax has had a big influence on their decision to set up here. If the corporation tax rate was to be altered upwards there could be a negative backlash by multinational companies. Some companies that operate out of Ireland rather than other countries with lower wage costs could decide to move to these locations, as the difference would no longer now be offset with the low tax rate. This could also put the country at a disadvantage in trying to attract new companies to locate here as our relatively high wages along with a corporation rate at a parity with other European countries might result in us being viewed as a less attractive option.
There has been a lot of uncertainty with the Irish corporation tax rate recently, with a lot of pressure coming from European ministers for Ireland to raise their rate. One change that could be made would be constant pressure coming from the European Union
The corporation tax rate in Ireland is extremely low compared to other European nations, which is used as an incentive to attract many multinational companies to Ireland. The impact this has on the Irish business environment is immense as it creates employment and opportunities for other businesses to be formed. Below I’m going to go into further detail and discuss what impact this could have on Irish Businesses if changes are made.
The corporation tax rate for Ireland is 12.5% which our government are determined not to change. The Irish government is coming under a lot of pressure from Europe to raise their rate. Most European nation’s tax rates are at an average of 40% which is not an attractive rate for multinationals to set up there. This has resulted in many of the biggest American multinational companies setting up their European headquarters in Ireland, which include such global giants as Google, Facebook and Twitter. Although there are other factors that have resulted in these companies setting up in Ireland the low corporation tax has had a big influence on their decision to set up here. If the corporation tax rate was to be altered upwards there could be a negative backlash by multinational companies. Some companies that operate out of Ireland rather than other countries with lower wage costs could decide to move to these locations, as the difference would no longer now be offset with the low tax rate. This could also put the country at a disadvantage in trying to attract new companies to locate here as our relatively high wages along with a corporation rate at a parity with other European countries might result in us being viewed as a less attractive option.
There has been a lot of uncertainty with the Irish corporation tax rate recently, with a lot of pressure coming from European ministers for Ireland to raise their rate. One change that could be made would be constant pressure coming from the European Union