A global agreement on tax, one that respects Ireland's 12.5 per cent corporate tax rate, is vital to facilitate further trade and investment, Taoiseach Leo Varadkar has said.
Speaking at the American Chamber of Commerce Ireland’s annual Thanksgiving lunch, he warned that a major shake up of the global tax system, which currently allows companies book profits in low-tax jurisdictions such as Ireland to minimise their tax bills, was inevitable.
He said the Government was working with others, under auspices of the Organisation for Economic Co-operation and Development (OECD), to find a stable global consensus for how and where companies should be taxed.
“We are open to solutions which respect our right to compete fairly and which respect the legitimacy of Ireland’s long-standing 12.5 per cent corporate tax rate,” Mr Varadkar said.
The OECD’s proposals would give bigger countries more rights to levy tax on corporate income earned from sales in their territories, meaning some of the profits accounted for in Ireland by big multinationals would be reallocated elsewhere.
Mr Varadkar said Ireland had become the tech capital of Europe. "We are home to a huge array of dynamic Irish tech companies, and we are the European headquarters for many of the world's leading names, including Apple, Google, Facebook, Intel, Microsoft, and Twitter," he said, noting 160,000 people were employed by US companies here.
“These tech companies are responsible for a flow of talented young people forward and back between Ireland and the US to the benefit of both of our societies.
“We all agree that a stable and globally-agreed international tax framework is vital to facilitate trade and investment.”
Tax certainty
On a recent visit to Ireland the OECD’s head of tax policy, Pascal Saint-Amans, said a global deal on tax “cannot entail big losers and big winners” but must strike a balance, while insisting that Ireland would gain from “tax certainty”.
In his speech Mr Varadkar also touched on housing, suggesting the Government had “deliberately adopted a non-ideological approach, focussing on delivery”.
“We are beginning to see the results. Every year housing construction is increasing, and there is growing evidence of house prices levelling off, even falling back in Dublin, which is no bad thing.”
