The Minister for Enterprise, Trade and Employment, Mr Martin, has indicated the Government may look at a reduction in the 12.5 per cent corporation tax rate if Ireland's competitiveness shows any decline.
In an interview published this morning, Mr Martin said the Government could not rule out such a move but that such a move was 'not imminent.'
Mr Martin's comments come after the man nominated to become European Union Taxation Commissioner last week said he does not plan to propose legislation to harmonise corporate tax rates in the 25-nation bloc.
"For the time being I don't see any community action on corporate tax rates. This should be let to the decision of each member state," Mr Laszlo Kovacs told a confirmation hearing in the European Parliament.
Mr Kovacs, a former Hungarian foreign minister, initially failed to win approval at a previous hearing as energy commissioner, prompting Commission President Jose Barroso to move him to a different portfolio when he dropped Italy's controversial nominee Mr Rocco Buttiglione and Latvia's Mr Ingrida Udre.
Mr Kovacs defended differential corporate tax rates between eastern and western Europe, saying there was little empirical evidence of a "race to the bottom", and corporate relocation to the east was not principally driven by tax rates.
EU rules allow member-states to freely set their own tax levels.
In September, European Union finance ministers agreed to examine how to harmonise the rules under which corporate tax is calculated. The Government indicated at the time that it would participate in a working group on the issue, despite its opposition to the proposal.