On 14 October 2014, the Minister for Finance Michael Noonan, delivered Ireland’s Budget for 2015. As part of the Budget package, the Minister also published a Road Map “to secure Ireland’s place as the destination for the best and most successful companies in the world”.
The favourable provisions introduced in the Budget increase the attractiveness of Ireland as a location to carry on business and also improve the transparency of Ireland’s tax regime.
A summary of the advantageous measures incorporated in the Budget are as follows:
Maintenance Of The Irish Corporation Tax Rate Of 12.5%
The Minister reaffirmed the Irish government’s commitment to the 12.5% Corporate Tax (“CT”) rate by stating “The 12.5% tax rate never has been and never will be up for discussion. The 12.5% tax rate is settled policy. It will not change”.
Protection Of Ireland’s Tax Regime
The Minister introduced changes into Irish tax legislation to answer the criticism received in the International tax environment concerning Ireland’s CT regime. The proposed changes will abolish the use of the “Double Irish" structure.
Improved Intellectual Property Regime
The Minister detailed the introduction of a “Knowledge Development Box” system and also made various favourable amendments to the current Intellectual Property (“IP”) tax rules. The proposed changes will make Ireland an attractive location for the development of intangible assets and will also increase Ireland’s competitiveness in the international IP arena.
Enhanced Research & Development Credit Regime
Welcome amendments were introduced to the Research and Development (“R&D”) credit regime. The proposed changes will be very favourable for Irish companies engaging in R&D activity.
Enhanced Special Assignee Relief Programme To Attract Foreign Talent
Favourable changes have been introduced to the Enhanced Special Assignee Relief Programme (“SARP”) to enable Irish employers to compete with other countries, to attract the talent necessary to establish and develop global businesses in Ireland.
Competent Authority For Transfer Pricing
The Minister signaled that international Transfer Pricing (“TP”) disputes are likely to grow in number and therefore Ireland must be ready to defend its tax base. Accordingly, the Minister has promised that significant additional resources will be assigned to the Irish Revenue Commissioners in order to meet this important requirement.
Expansion Of Tax Treaty Network
In order to keep attracting global businesses to locate in Ireland, the Minister advised that it is the government's intention to continue with the significant expansion of Ireland’s tax treaty network.
The Way Forward
While Irish budgets of the recent past dealt mainly with austerity, the measures introduced in the recent budget focused on increasing Ireland’s attractiveness for foreign direct investment and answering international critic’s to Ireland’s tax regime. Through the introduction of the Road Map, Ireland has enhanced the reputation of its corporate tax regime and this will in turn provide certainty to international investors.