DUBLIN: Delivering Budget 2017, Noonan said Ireland’s 12.5% rate – one of the lowest rates in Europe – is “an important part of the reason why we are an attractive destination for foreign direct investment”.
Noonan warned that the UK’s decision to leave the EU presents “a real risk” to the Irish economy given the close links and the high level of trade between the two nations but added that it could also “present opportunities to attract businesses that may move out of the UK, or are considering locating there in the coming years.”
He also announced that he has published an update on the country’s international tax strategy, which he argued shows the progress the country has made over the past 12 months and demonstrates Ireland’s commitment to meeting new international tax principles. It also highlights that the Irish corporate tax regime meets the “highest standards” in tax transparency and will remain “fair but competitive” in the future.
“In 2014, my department published a review of corporation tax policy,” Noonan said. “Since then, there have been many developments in international taxation, including the OECD’s base erosion and profit shifting initiative and legislative proposals from the European Union.
“In this context, Ireland needs to ensure that our corporation tax code continues to meet international standards whilst also delivering tax certainty for business and maintaining our competitiveness.”
He announced that the government has appointed independent expert Seamus Coffey to carry out a review of the corporation tax code, which the government agreed to after the Apple ruling. Noonan also announced he would introduce a new “strict liability” criminal offence to facilitate the prosecution of serious cases of offshore tax evasion.
“The release of the so-called Panama papers earlier this year showed how defaulters use offshore structures and accounts to avoid paying tax,” he said.
“In the Finance Bill, I will act to restrict the opportunity for offshore defaulters to use the voluntary disclosure regime with effect from May next year, and I will introduce a new strict liability criminal offence to facilitate the prosecution of serious cases of offshore tax evasion.”
The finance chief said he was pleased to announce “the allocation of an additional €5m (£4.5m) to the Revenue Commissioners for the recruitment of 50 additional staff and additional investment in systems and equipment.”
Uncertainty surrounding the result of the EU referendum prompted Noonan to reduce Ireland’s forecast for GDP growth for next year to 3.5%.
“What the effect will ultimately be will depend on the settlement between the UK and the EU. It is not possible to forecast the impact of this at present,” he said.
