MICHAEL NOONAN HAS announced that companies registered in Ireland for tax reasons will no longer be allowed to be ‘stateless’ in terms of their residency.
The Minister for Finance’s announcement during today’s Budget speech will close a loophole which has allowed some of the biggest companies in the world to make use of Ireland’s tax laws in a legal way to ensure that they paid lower levels of tax than they otherwise would have done.
Companies had used subsidiary companies which had no fixed country of residence and were considered ‘stateless’ in order to avail of Ireland’s comparatively low corporation tax rate.
The issue came to light when a US Senate committee raised questions about the international tax practices of companies such as Apple and Google earlier this year.
The Government had repeatedly rubbished any suggestion that there had been a sweetheart deal with any big companies to encourage them to set up in Ireland. However today’s move will be seen as an attempt to firm up confidence among the public about the corporation tax paid by large multinational companies.
The Minister for Finance also reaffirmed the Government’s long-held to commitment to not increase the corporation tax rate, despite calls for it to be increased from some commentators.
“We are 100 per cent committed to the 12. 5 per cent corporation tax rate,” he told the Dail chamber. “This will not change”.
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