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  • 2017-10-17 (xsd:date)
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  • Is Ireland Lowering Its Corporate Tax Rate? (en)
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  • As part of his push for tax cuts and tax reform, United States President Donald Trump held a press conference at the Rose Garden on 16 October 2017, during which he made an interesting comparison between the United States and other countries, in particular, Ireland: The relevant section begins at 1:34 below: His claim regarding Ireland's corporate tax rate is entirely false. Not only does the Irish government have no plans to reduce the country's rate of corporation tax to eight percent, but no such proposal has ever even been brought up. As it happens, Ireland reset all its taxation rates just days before Trump's comments as part of the country's annual budget, which took place on 10 October 2017. The government kept the rate of corporation tax at 12.5 percent (not 12 percent, as Trump stated), and Paschal Donohoe, Ireland's Minister for Finance and Public Expenditure and Reform (roughly equivalent to Treasury Secretary) said at the time: In a statement, a spokesperson for Donohoe directly refuted President Trump's claim: On 18 October 2017, Ireland's Taoiseach (Prime Minister) Leo Varadkar called Trump's claim fake news. In answer to a question from an opposition politician, Varadkar told the Irish parliament: (You can watch a video of the Taoiseach's remarks here. The relevant section starts at 25.29.) It's not clear what the basis of Donald Trump's claim was, or where he had heard that Ireland would be lowering its corporation tax rate to eight percent. A reduction from 12.5 to 8 percent was not ever brought up by the Irish government in the runup to the October 2017 budget, nor was it proposed by any opposition political party. At the last general election in 2016, no political party proposed reducing the corporate tax rate in their manifesto. One economic analysis has estimated that the effective rate of corporation tax in Ireland — tax paid on a company's net operating surplus — is 8.4 percent, and it is just about conceivable that this is what President Trump had in mind. However, his claim that Ireland is about to reduce the corporate tax rate down from 12 percent is a reference to the country's headline corporate tax rate (which is actually 12.5 percent), so it's still not clear what the source or logic of Trump's claim was. Ireland has one of the lowest headline rates of corporate tax in the European Union, but has been under pressure from some European Union leaders seeking to establish harmonized tax policies across the continent, which would likely entail an increase from Ireland's current rate of 12.5 percent. (en)
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