COMPANIES IN IRELAND paid an average effective tax rate of between 10.7% and 10.9% in the last 11 years, a new paper has said.

The Technical Paper on the Effective Rates of Corporation Tax in Ireland, based on research by UCC lecturer Seamus Coffey, sets out to find out the best way to determine what the rate actually paid by companies was.

Using eight different methods, the paper came to the conclusion that figures from the Central Statistics Office and Revenue Commissioners were the most reliable, but said that there is “no single best measure of the effective tax rate”.

In the case of multinational companies, the paper says that “lower effective tax rates can be identified”, saying that while it is possible to structure activity in a way that avoids paying taxes, it is not possible to pay lower taxes on Irish-made profits.

The paper says that the tax rates are below Ireland’s official tax rate of 12.5%, but says that this because of the inclusion of foreign profits.

“The reasons for this are the inclusion of foreign-source profits in the case of taxable income and the exclusion of the interest cost of financing in the case of Net
Operating Surplus.”

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