THE DEPARTMENT OF Finance has strongly denied US president Donald Trump’s claims that Ireland is set to cut corporate taxes from the much-publicised 12.5% rate.
Trump is campaigning for a drop in America’s tax rate from 35% to 20%, arguing that the US must do so in order to remain commercially competitive.
Yesterday, in a speech in the White House’s Rose Garden, Trump outlined his justification for such a move, including namechecking Ireland’s rate and contradicting Minister for Finance Paschal Donohoe’s Budget speech from last Tuesday.
“You look at other countries and what they’ve done, and we’re competing with other countries,” he said.
“When China is at 15% and I hear that Ireland is going to be reducing their corporation rates down to 8% from 12%.
“You have other countries also reducing. We can’t be at 35% and think we’re going to remain competitive in terms of companies and jobs.”
However, in a statement today the Department of Finance said that “there are no proposals to change the corporation tax rate”.
The spokesperson referred to Donohoe’s recent Budget speech, in which he clarified that the tax rate of 12.5% (not 12%) is not changing:
“Our position is clear. The 12.5% tax rate is, and will remain, a core part of our offering.”
The department also highlighted the fact that Donohoe confirmed the 12.5% tax rate in the recently published update on Ireland’s international tax strategy.
“In Ireland, we have a stable tax regime. We have a competitive 12.5% tax rate, which is not going to change,” he said.
Reiterating the words of Donohoe, the Department for Finance said:
“Ireland’s corporation tax regime and 12.5% corporation tax rate will continue to be competitive while also offering long-term certainty to international business.
“As always, we remain alert and responsive to any changes in the US or global tax environment.”
Pundits have played down the risks to Ireland should the US shift to a 20% corporate tax rate, claiming that the move would be unlikely to endanger the country’s attractiveness for foreign investment.
Reporting by Hayley Halpin and Peter Bodkin.