Ireland sixth easiest place for firms to file and pay taxes

Ireland is the sixth easiest place in the world for companies to file and pay their taxes, according to a study published on Friday.

The study, conducted jointly by professional services firm PwC and the World Bank Group, found that Ireland's tax system ranks as the most effective in the EU for paying business taxes, and the sixth most effective in the world.

It listed Ireland, Denmark, Norway, the UK and Finland, in that order, as the top five ranking countries in the EU .

The top worldwide economies for ease of paying taxes are Qatar and the United Arab Emirates (in joint-first place), Saudi Arabia, Hong Kong, Singapore and Ireland.

The report, which compared tax regimes across 189 economies, shows that, on average, a medium-sized company in Ireland will pay a total of 25.9 per cent of its profits in taxes. The taxes include property taxes, capital gains tax, financial transactions tax, waste collection taxes, vehicle and road taxes, and small taxes such as fuel taxes.

The study found a typical Irish company spends around a quarter of its commercial profit in taxes, just over two weeks dealing with its tax affairs and makes a tax payment nearly every six weeks. Globally this compares to the typical company paying more than a third of its commercial profit in taxes, spending more than seven weeks dealing with its tax affairs and making a tax payment every two weeks.

The report also examines the administrative burden of paying taxes and mandatory contributions. A medium-sized company in Ireland would need 82 hours per year to comply with its obligations. This compares to an EU average of 173 hours. Globally, it takes an average of 261 hours annually to comply with tax regulations, which is 15 fewer hours than five years ago.

Qatar and the United Arab Emirates tied for the top spot as countries where it is easiest for firms to file and pay taxes. Companies in the UAE need just 12 hours per year to comply with tax obligations, while those in Qatar need 41 hours.

PwC Ireland's head of tax Joe Tynan said the report confirms that Ireland is competitive on corporate taxes but also on the costs of employing people.

“Ireland places a comparatively reasonable tax burden on employment. This will be important as international companies decide where to locate key international centres.”