Uncertainty on tax is a big impediment for companies considering investing in Ireland, the incoming president of the Irish Taxation Institute says.
Shane Wallace said consistency was critically important at a time of global geopolitical volatility. And he called on the Government to prioritise stability and predictability in the corporate tax regime and ensure economic competitiveness.
Mr Wallace, who is also a tax and legal partner in Deloitte, became the 50th president of the Irish Tax Institute (ITI) on Thursday.
“At a time when international rules are shifting, Ireland must reinforce its reputation as a reliable and transparent jurisdiction, one where investors can make long-term decisions with confidence”, he said.
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Mr Wallace, whose areas of expertise include property, urged the Government to avoid “reactionary legislative changes” which, he said, were having adverse knock-on effects in the areas of property investment and construction.
The incoming ITI president said Budget 2026 needed to offer “significant support” to Ireland’s small and medium-sized enterprises.
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“We can do more to encourage and incentivise investment,” he said. “For example, we pride ourselves on being competitive on tax, yet we have a 33 per cent rate on capital gains tax.
“We do have reliefs but as a starting point that rate is very, very high compared to other OECD countries.”
Ireland, he said, needed to “enhance [its] attractiveness as a location for foreign direct investment and create the right environment for an ambitious, innovative, and export-oriented SME sector while bolstering safeguards for taxpayers and increasing efficiency in the tax collection system”.
Mr Wallace said it was regrettable that the rules governing the taxation of the world’s largest companies were extremely uncertain at present, given US dissent.
In advance of the budget on October 7th, the institute’s pre-budget submission noted that “the retreat by Ireland’s main investment partner from the globalised trading order ... has brought an unprecedented threat to the heart of the Irish economic model”.
Ireland, it said, was “uniquely vulnerable” among EU states given its “outsized share of large American multinational companies headquartered here”.
The pre-budget submission said that at a time when competition for foreign investment was becoming ever more intense, even within the EU, the Government “cannot afford to get caught in the headlights of matters beyond its control. Nothing should distract it from a laser-like focus on competitiveness.”
It called for reform of the State’s tax credit for research and development, including increasing the rate of the relief from the current 30 per cent, expanding the definition of qualifying expenditure and loosening rules on outsourcing of R&D.
It also wants the Government to simplify rules around share-based remuneration which, it says, “is incadverseingly regarded by businesses as an effective way of rewarding key employees”.
The institute is hosting a global tax policy conference with the Harvard Centre for International Development next month.
