Varadkar: Ireland’s corporate tax rate brings certainty
Leo Varadkar has defended Ireland’s corporate tax rate, saying that it gives investors “certainty”.
The Irish premier was speaking at the US Chamber of Commerce in Washington DC as part of his four-day St Patrick’s tour of the US.
The Fine Gael leader said that Ireland’s corporate tax has been at 12.5% for decades and that “isn’t going to change”.
“There are actually countries in the European Union that have a lower tax rate than us so we are not even the lowest,” he added.
“I think what we offer is certainty that even though there may be changes in Government, even though we may go through different economic cycles of recession or growth, that is a certainty and I think that gives investors or potential investors that certainty you need if you’re making the 20 or 30-year multibillion-euro investment in an economy. You want to know the fundamentals of those of policies are going to stay the same.”
Following meetings with businesses leaders, community leaders and members of the Irish diaspora, Mr Varadkar addressed an audience on Wednesday as part of his engagements in the US capital.
Speaking on stage, US Chamber of Commerce chief executive Tom Donohue said that Ireland was able to improve its economy and employment because “it stuck to its tax rates”.
“Now we are beginning to see in the EU there are a lot of discussions on digital taxes on big companies, which is the next discussion in how do we tax people more than they would like,” he added.
He asked the Fine Gael leader how Ireland was keeping to its tax commitments.
“On (EU) proposals around digital tax, we didn’t support them and they have largely been parked,” Mr Varadkar added.
“Some countries like France have gone ahead and done that unilaterally which is entirely their right to do that. But that has been parked as an EU proposal and we are now looking for a global solution from the OECD (Organisation for Economic Co-operation and Development) and I think that is the right approach.
“People across the EU and probably America see that they pay a lot of income tax and they wonder why some big companies don’t and why some big companies don’t pay their fair share of taxes, and that’s not sustainable nor is it right.
“I think there will be changes in global taxation and I want Ireland to be on the right side of history when it comes to those but we shouldn’t do anything that creates a disadvantage for ourselves or hands an advantage to our competitors and that’s why if we are going to change the way tax is structured, the best way to do it is on an international level and I think that is best done through the OECD.”