Ireland ‘engaging with OECD on taxes’

Ireland stands to benefit from any potential changes to international tax policies currently being considered by the OECD, and is playing an active and constructive role in their formation, Tánaiste Eamon Gilmore has said.

Speaking at the American Chamber of Commerce (AmCham) spring lunch in Dublin yesterday, Mr Gilmore said that aggressive tax plans are a global issue, requiring a global response.

In relation to new rules on how multinational firms manage their international tax affairs, he added that Ireland is “constructively” engaging with the OECD on its BEPS (base erosion and profit sharing) debate, the results of which should be known by the end of this year.

Also speaking, guest of honour, outgoing IDA Ireland chief Barry O’Leary said foreign direct investment is likely to remain a main driver of Ireland’s economic recovery for the foreseeable future, but noted concern over the state of the wider European market given that most US firms locating here do so in order to serve mainland Europe.

However, he said the IDA still has a good immediate pipeline of FDI deals and is looking at new forms of investment.

Meanwhile, the central theme from AmCham itself was another call for a reform of Ireland’s personal tax regime. Chamber president Louise Phelan suggested any further personal tax increases could hamper future expansion plans of US companies in Ireland.

“The additional impact of high personal tax rates is to raise costs for companies as they try to compensate for this tax burden,” she said

We also know there are issues with attracting and retaining skilled employees to Ireland because of the high personal taxation rates. The National Competitiveness Council has stated that the cumulative effect of increases in income taxes, changes to bands, the introduction of the USC and other new taxes, has been a loss of competitiveness in attracting jobs,” Ms Phelan said.