A Toast to Irish Corporate Tax Policy
March 17, 2006
As Americans spend their St. Patrick’s Day trying to emulate the Irish by wearing green, eating stew, and doing lots of drinking, we can only wish that this emulation would extend to corporate tax policy. As a recent survey of tax executives in the U.K. reveals, Ireland gets top nods in Europe for corporate tax friendliness. From Tax-News.com:
Despite repeated complaints from industry over the growing UK tax and red tape burden, a recent survey has found that the UK remains significantly more competitive than France, Germany, Belgium or Spain. However, it has a long way to go before reaching the levels of tax competitiveness achieved by Ireland and the Netherlands.
A survey of senior tax executives in 50 large UK-based companies, including representatives from the FTSE 100, FTSE 250 and large subsidiaries of foreign parent companies, carried out by KPMG, the professional services firms in January and February this year, found that 54% placed Ireland in the top three countries for tax competitiveness, with 50% choosing the Netherlands.
Luxembourg attracted the vote of 32% of the respondents, while the UK polled 14%. Belgium and Spain both scored 4% while France and Germany received no votes.
The majority (two-thirds) of the respondents expressed the view that taxation was a consideration when deciding where to locate operations, and over 70% said that tax issues have become more important for international business planning over the past two years.
Ireland’s top corporate tax rate is 12.5 percent, the lowest among any industrialized country. They dramatically lowered their corporate taxes while other countries decided against it; and largely because of this, Ireland has flourished in economic growth while much of other parts of Western Europe have struggled.
For more on a comparison of corporate tax rates around the world, check out a recent Tax Foundation piece entitled “We’re Number One”, detailing the high U.S. taxes on corporate income.