Ireland has done an "amazing job" in managing its economy and by not raising taxes in the recession, US president Donald Trump has said.
In a wide-ranging interview with the Economist, Mr Trump praised the State for how it has managed its finances through the recession, saying: "Ireland's done an amazing job".
“You look at Ireland. I own great property in Ireland that I bought during their downturn. And I give the Irish a lot, a lot of credit. They never raised their taxes,” he told the magazine.
“You know you would have thought when they were going through that really . . . they would’ve double and tripled their taxes. They never raised it a penny. And they got through it and they are thriving now. Ireland’s done an amazing job. A lot of companies have moved to Ireland and they like it.”
US tax reforms
In April, the Trump administration proposed one of the biggest reforms of the US tax system in decades, saying it will cut the corporate tax rate from 35 per cent to 15 per cent in an effort to “unleash” growth in the economy.
The proposed package – which still needs to be approved by Congress – could have a significant impact on US foreign direct investment into the Republic if passed in its current form, potentially eclipsing the State's competitive advantage on corporate tax.
Mr Trump, who owns the Trump International Golf Links and Hotel in Doonbeg, Co Clare, sat down with editors from the Economist for the interview on May 4th, and it published what it calls a "lightly edited" transcript on Thursday.
He added: "We're going to be getting a lot of companies moving back and we're going to get very few companies leaving the United States because we went from the highest tax rate of . . . not only major, you know they always say major countries, just about the highest tax rate period. And then when you add all the other things. And then when you add the regulations to the tax . . . I've had people tell me, because I've cut massive regulations and we've just started, believe me. But we've cut regulations massively."
Threats
The State has repeatedly refused to adjust its favourable corporate tax regime which has been successful in attracting large companies from overseas. While the threat from the US reform is more recent, the proposed reform in Europe in the shape of the Common Consolidated Corporate Tax Base (CCCTB) is potentially more damaging.
Under the CCCTB, cross-border companies would have to comply with only one, single EU-wide system for computing their taxable income. The system would reduce the frequency of cases like the recent one involving Alphabet (Google’s parent company). In that case, Alphabet settled a dispute with Italy for €306 million after being accused of avoiding taxes by booking income earned in high-tax European markets through a unit based in Ireland.
