Ireland’s corporate tax advantage may have limited life

THE advantage Ireland has in attracting foreign companies as a result of its low corporation tax rates may have a limited time to run, a report on taxation in the EU has warned.

While the country’s 12.5% tax on companies has been undercut by Cyprus and Bulgaria, which have an unadjusted rate of 10%, it is still proving very attractive to foreign direct investment.

The country’s corporate tax take of 2.9% is less than the EU average of 3.3%. But the problem for Ireland may not just be pressure from other EU member states that want to see Ireland’s rates move closer to their own but also falling income from companies.