A recent technical note issued by the Department of Finance indicates that Ireland has maintained an effective corporate tax rate of about 11 percent since 2003. Enterprises operating in Ireland are liable to corporation tax at 12.5 percent on profits from trading activities. A reduced 10 percent rate was available until 2010 for profits from manufacturing, after which this was replaced 12.5 percent rate. A 25 percent rate applies in respect of investment income, rental income and other non-trading income, and for profits for some petroleum, mining, and land-dealing activities.
The technical note looks at different methods of computing effective tax rates. The note is designed to provide information for people looking to understand the techniques involved in such calculations, rather than to produce a definitive figure for the effective tax rate. According to the technical note the best estimate can be gleaned from the national aggregate data. Statistics issued by the Central Statistics Office and the Revenue Commissioners can be used for this purpose and the effective rate can be computed on the basis of the Net Operating Surplus and Taxable Income.
Ireland has remained committed to a low corporate tax rate even during recent years when there has been pressure on the public finances. Although the 10 per cent rates available for certain activities in some areas were phased out at the request of the European Union, the 12.5 per cent rate has been maintained. Ireland has constantly sent the message to international business that the low tax rates are to remain in place.