Irish corporate tax rate second lowest in Europe – UHY
Irish corporate tax rate second lowest in Europe – UHY
With its rate of 12.5pc, Ireland has the second lowest corporate tax burden in Europe behind Estonia which currently has zero corporate tax, according to new research from accounting and consultancy network, UHY.
The firm looked at tax data in 21 countries across its international network and found that Ireland has the third lowest tax rate, with both Estonia and Dubai have a rate of zero.
“Ireland has kept corporate taxes low and has successfully enticed large multinational businesses such as Microsoft and Google to place their headquarters here and to remain here,” said Alan Farrelly, partner, UHY Farrelly Dawe White. “The low 12.5pc tax rate applies to all businesses – irrespective of whether their pre-tax profit is US$100,000 or US$100m.
“The need for Ireland to keep its corporate tax rate low is illustrated by changes that the UK made to its tax code to attract WPP back to the UK.
“Companies are increasingly mobile and are able to switch tax domicile with relative ease,” he said. “This has put governments in a quandary, as they seek to boost tax revenues in order to shore up public finances. Many countries have opted to resolve this problem by increasing personal taxes while reducing corporate tax rates. Once a major economy slashes corporate tax rates, however, it puts pressure on others to take similar measures to remain competitive.”
The research reveals that businesses making a statutory tax profit of US$100m each year will pay over three and half times more tax in the highest taxing country Japan (US$41,990,000) than in Ireland (US$12,500,000).
| Tax payable | Tax payable | Tax payable | ||||||||
| (assuming pre-tax profit of US$100,000) | (assuming pre-tax profit of US$1 million) | (based on statutory pre-tax profit of US$100 million) | ||||||||
| Brazil | $34,000 | 34% | Japan | $419,900 | 42% | Japan | $41,990,000 | 42% | ||
| Germany | $32,450 | 32% | USA | $340,000 | 34% | USA | $35,000,000 | 35% | ||
| Italy | $31,400 | 31% | Brazil | $340,000 | 34% | France | $34,397,363 | 34% | ||
| Japan | $31,106 | 31% | France | $333,333 | 33% | Brazil | $34,000,000 | 34% | ||
| India | $30,900 | 31% | Germany | $324,500 | 32% | Germany | $32,450,000 | 32% | ||
| Mexico | $30,000 | 30% | India | $324,450 | 32% | India | $32,445,000 | 32% | ||
| Australia | $30,000 | 30% | Italy | $314,000 | 31% | Italy | $31,400,000 | 31% | ||
| China | $25,000 | 25% | Australia | $300,000 | 30% | Australia | $30,000,000 | 30% | ||
| Malaysia | $25,000 | 25% | Mexico | $300,000 | 30% | Mexico | $30,000,000 | 30% | ||
| Spain | $25,000 | 25% | Spain | $278,571 | 28% | Spain | $30,000,000 | 30% | ||
| Israel | $24,000 | 24% | China | $250,000 | 25% | Canada | $29,187,384 | 29% | ||
| France | $23,350 | 23% | Malaysia | $250,000 | 25% | UK | $26,000,000 | 26% | ||
| USA | $22,250 | 22% | Israel | $240,000 | 24% | China | $25,000,000 | 25% | ||
| Netherlands | $20,000 | 20% | UK | $238,337 | 24% | Malaysia | $25,000,000 | 25% | ||
| Russia | $20,000 | 20% | Netherlands | $235,714 | 24% | Netherlands | $24,342,857 | 24% | ||
| UK | $20,000 | 20% | Canada | $223,781 | 22% | Israel | $24,000,000 | 24% | ||
| Romania | $16,000 | 16% | Russia | $200,000 | 20% | Russia | $20,000,000 | 20% | ||
| Canada | $15,500 | 15.5% | Romania | $160,000 | 16% | Romania | $16,000,000 | 16% | ||
| Ireland | $12,500 | 12.5% | Ireland | $125,000 | 12.5% | Ireland | $12,500,000 | 12.5% | ||
| Dubai, UAE | $0 | 0% | Dubai, UAE | $0 | 0% | Dubai, UAE | $0 | 0% | ||
| Estonia | $0 | 0% | Estonia | $0 | 0% | Estonia | $0 | 0% | ||