Ireland is on a “positive path” in terms of growing incoming multinational investment despite the potential threat of global corporate tax reform, IDA said.
And the Tánaiste said the government will seek to overturn stealth taxes, in part to maintain Ireland’s appeal to foreign multinational workers.
The IDA said Ireland attracted 142 foreign multinational investment in the first half, 8% more than last year and close to pre-Covid 2019 levels.
Of the investments, 62 came from companies that were not previously present here, while almost half were in regional locations outside of Dublin.
IDA chief Martin Shanahan said while there is “nothing for sure” about the course of the pandemic or economies, the global foreign direct investment (FDI) flow is expected to increase by up to 15% this year and multinational corporations continue to ” have considerable confidence ”. In Ireland.
“It’s because of the stability of the tax system and tax rates over many years, and that’s why we keep seeing the numbers we see,” he said.
Although a new global tax framework is more likely than not, Shanahan said client companies would not be alarmed if Ireland did not initially sign the OECD proposals and try to further negotiate the minimum corporate tax rate they contain.
“It will be important that Ireland continues to offer investors stability and a competitive supply under a new global tax framework,” he said.
At the presentation of the latest IDA report, Tánaiste Leo Varadkar defended the government’s decision to continue negotiating the terms of the corporate tax reform.
“We shouldn’t have any illusions about what’s going on here. It’s not just about tax equity and big companies paying their fair share of taxes. It’s also about big countries trying to get a bigger share of the pie, ”said Varadkar.
He said Ireland is pursuing its interests as the UK and US are doing for themselves as part of the process.
“It’s much better for us to be part of an agreement than to be outside of it, and we want to help shape that agreement …[but] We will not sign or endorse any agreement that does not protect our basic interests as a small island economy, ”said the Tánaist.
Mr Shanahan said taxes are an important part of what Ireland has to offer to multinational corporations, but only part of it. However, he said competition from FDI from other countries is “significant” and all issues of Ireland’s competitiveness need to be kept in mind – from personal taxes and housing to air connections.
The Tánaiste said the government was “not perceived as inadequate” on capital spending.
He said Ireland’s problem with the high marginal tax rate could be addressed. While there won’t be an income tax cut in the next budget, the government will aim to stop covert tax hikes and prevent people from falling into the higher tax net and paying more of their income at a higher rate, he said.
IDA said there was potential for more than 12,530 jobs through multinational investments made in the first half of the year, up from 9,600 job openings a year ago.