Paschal Donohoe to Europe: ‘Hands off’ our corporate tax rate

Finance Minister Paschal Donohoe has issued a strong “hands off” message to Europe over moves to force Ireland to increase its corporate tax rate.

Mr Donohoe, speaking from Davos, was responding to sharp attacks on Ireland’s tax regime and said he strongly rejected suggestions that Ireland is in a “race to the bottom”. He said Ireland’s 12.5% rate is competitive, transparent and stable and said he is not going to consider any move on that.

He said Ireland, like all EU countries, has the right to set its own tax rates and no change to that policy is envisaged. 

He lashed out at French president Emmanuel Macron’s criticisms of Ireland when he was indicating his desire to lower France’s corporate tax rate: “When president Macron visited Davos his intention was to reduce French corporation tax. Why should competitiveness only be the prerogative of big countries.”

“Small open economies like Ireland also have to be competitive. What I emphasised is the legitimacy of what we are doing,” he told RTÉ Radio.

On a panel discussing tax avoidance, Nobel prize-winning economist, Joseph Stiglitz said that European commissioner Margrethe Vestager is a “champion” for pursuing the Apple tax case, in which her office found in 2016 Ireland provided €13bn of allegedly illegal tax aid. The Government and Apple are appealing the finding.

Mr Stiglitz said this State has been a key player in a “race to the bottom” and that mounting competition between countries, including a recent tax shift by the US, will not end until company tax rates “end at zero”.

“The contention that national tax policy should be set by national governments to allow them to fund national services for their own citizens is a proposition that has support all over the EU,” Mr Donohoe said.


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