Ibec: US Tax Reforms A Mixed Bag For Ireland
Jason Gorringe, Tax-News.com, London
03 October, 2017
The US Government's planned corporate tax reforms may pose challenges for Ireland's international competitiveness, but the country will remain a compelling investment location for American firms, says business association Ibec.
The Trump Administration and senior Republican members of Congress have put forward a package of tax reforms that includes a reduction in the corporate tax rate from 35 percent to 20 percent. It also includes a one-time tax on unrepatriated income currently held overseas, with two different rates for cash and non-liquid assets, and an exemption for dividends from foreign subsidiaries.
Reacting to the proposals, Fergal O'Brien, Director of Policy and Public Affairs at Ibec, said: "The plans proposed by President Trump to reform the US corporate tax system and to introduce a new system of taxing overseas profits may result in competitive challenges to Ireland if passed in full. However, US firms will still find Ireland a compelling investment location, thanks to the strong business substance behind our economic model and the multi-faceted measures we have on offer to attract inward investment."
According to O'Brien, Ireland is used as a gateway by US firms to gain access to the EU and other international markets. He said that Ireland's 12.5 percent corporate tax rate remains an important factor, but added that Ireland also offers ease of doing business and cost competitiveness.
O'Brien does not believe that the US Government's proposed repatriation holiday will have a material impact on investment by US multinationals in Ireland. The impact of the intended shift to a territorial tax system will however depend on the detail of the scheme, he said.