Minister for Finance Brian Cowen has dismissed plans by the European Commission to create a common corporate tax base in the EU, claiming the idea had no merit. He also said the Government would not raise the 12.5 per cent corporate tax rate.
The Minister was speaking at a lunch hosted by the American Chamber of Commerce Ireland to mark Thanksgiving day in the US.
Chamber president Eoin O'Driscoll said recent media reports about the corporate tax regime "misrepresented the true situation and were potentially damaging to Ireland's reputation as a preferred location for foreign direct investment".
Microsoft's accounting policies and financial performance in Ireland were the subject of a report in the Wall Street Journal, while information about Google's performance was published last week in The Irish Times.
Speaking after the event, Mr O'Driscoll said he was referring to the US rather than the Irish media reports. The US reports had portrayed Ireland as a tax haven, which it was not, he said.
At the lunch Mr O'Driscoll said the Irish taxation system was transparent and said that all political parties must put the protection of the corporation tax rate at the heart of their policies.
"Ireland has a strong network of tax treaties with all the major trading partners. Ireland operates a standard rate of corporation tax that applies to all companies [ whether domestic or foreign] and to all traded activities in Ireland," he said.
"Ireland's taxation regime stimulates investment here and maximises revenue to the Exchequer. Any changes could have far-reaching consequences and could negatively impact on our ability to generate and sustain wealth."
The Minister said afterwards he agreed with Mr O'Driscoll's remarks on the tax regime and was impressed with the clarity of his thinking.
While the Exchequer received €2 billion from corporation tax in 1997 when the rate was 36 per cent, Mr Cowen said corporate tax receipts this year would be more than €5.5 billion. "This Government knows the importance of using tax effectively as an economic instrument," he said.
"The chief executive of Dell, a company that employs 4,500 Irish people, said that it would consider reviewing its position in Ireland if our corporation tax increased. I can assure all of you here today that that is not going to happen on this Government's watch."
