Finance Minister Michael Noonan said Ireland has little to fear from attempts by the world’s richest countries to get multinationals to pay more tax, reiterating that the country’s headline 12.5% rate is not under threat.

Many Irish people might feel that this flurry of attention on an OECD project about the taxation of companies is irrelevant in the run-up to the budget on October 13.

As Ireland announced it was happy with the new tax strategy aimed at preventing countries privileging multinationals, Finance Minister Michael Noonan warned that the battle to protect Ireland’s foreign direct investment was not yet over.

Ireland’s attractively low rate of corporate taxation is once again under pressure with the recent release of the European Commission’s new action plan to tackle tax avoidance.

Ireland found itself surrounded by supporters, for the first time, on the issue of corporate tax rates, during an informal meeting of EU finance ministers.

A fresh drive by the European Commission to ensure companies pay their tax where they make their profits could have far-reaching consequences for Irish corporate tax revenue.

A swath of changes to corporation tax in the European Commission’s pipeline topped the Taoiseach’s agenda when he met the president of the European Commission, Jean Claude Juncker officially in Brussels.

The Department of Finance is understood to be “open-minded” over what rate should be applied to its proposed ‘knowledge box’ tax regime for patents and intellectual property assets developed here.

The issue of Ireland’s tax regime was not raised for the first time in a long time at the EU summit, showing that pressure to change its tax regime has lessened as a result of the EU investigation being widened to include all EU countries.

Glanbia has defended itself against claims it used Luxembourg-based subsidiaries to lower its Irish tax bill, saying it had an effective corporate tax rate of 17% last year on its global earnings, with the majority of payments made to the Irish exchequer.

The OECD has hailed the Government’s decision to abolish the controversial ‘double Irish’ tax avoidance programme as "a very smart move" and said it had no concerns that it would take six years to fully phase out the scheme.

The Taoiseach is expected to strongly defend Ireland's 12.5% corporation tax rate tonight, calling it a "matter of national sovereignty".

There is no need for the Irish Government to introduce any further changes to the corporate tax system on a unilateral basis following the publication of the OECD’s draft paper on base erosion and profit-shifting (BEPS), according to Padraig Cronin, head of tax & legal services, at Deloitte Ireland.

There has been no discussions between the Irish Central Bank and any US banks about a possible relocation to Dublin if the UK leaves the EU, according to sources. 

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.

Ireland must play “a strong role” in the formation of any new rules on how multinational companies manage their international tax affairs, the head of the US corporate representative body here has said.

If the OECD’s initiative on stamping out tax avoidance fails, then Ireland’s 12.5% corporate tax rate could be undermined as high tax countries take unilateral action, according to the head of tax policy at the OECD, Pascal Saint-Amans.