Ireland still the world's most competitive tax regime

Ireland is still viewed as having the most competitive tax regime in the world, according to new research from KPMG.

Almost three-quarters (73%) of all senior tax decision-makers at the biggest listed companies and subsidiaries of multinationals across the UK, ranked Ireland as the most competitive tax systems on the planet. Furthermore, almost half (48%) of all senior decision-makers in the 58 non-UK companies surveyed also said Ireland was the most competitive tax regime.

Although Ireland remains the clear leader as the world’s most competitive tax system, the gap between fifth-placed UK has narrowed from 15% to 12% since the last survey. The Netherlands is ranked in second place behind Ireland, followed by Singapore and Luxembourg respectively.

Paschal Donohoe, Minister for Finance, has remained extremely positive about Ireland’s appeal to large multinationals, despite recent changes to US tax rates, designed to make America more competitive.

Ireland’s current 12.5% corporation tax rate remains highly coveted, despite America cutting its own corporation tax rate from 35% to 21% in its most significant change to the nation’s tax legislation in almost 40 years.

“The proposition that we offer will continue to be competitive, even against the context of changes being made in the US and the UK,” said Donohoe.

“The engagement I have had with international companies since it has become clear what the direction of travel will be in the US has confirmed that view to me.”

Ireland was thought to be the top performing economy in the European Union (EU) for a fourth successive year in 2017. Meanwhile the Department of Finance’s annual taxation report spoke of record-high levels of tax receipts, demonstrating a marked recovery from their “post-crisis nadir”.

Income tax remains the single biggest revenue stream to the Irish state, followed by VAT. It should be noted that corporation tax receipts have also doubled in the last three years. Almost two-fifths (37%) of corporation tax receipts were received from the top ten biggest corporate taxpayers in 2016.

Last updated: 17th May 2018