Dutch Finance Minister Jan Kees De Jager has backed Ireland's right to retain a low corporation tax, saying direct taxation is a matter for individual governments.
Speaking in advance of meeting President Mary McAleese in The Hague, Mr De Jager said it was up to EU member states to decide what level of taxation was appropriate.
He added: ‘We do not specifically argue that corporation tax should be increased, but we do look at the total situation; maybe some taxes do need to be increased, but then it's up to the Irish themselves whether they increase VAT or corporation tax.’
Asked if corporation tax was effectively a sovereign issue, he said: ‘Yes it's a matter of national sovereignty whether or not to increase a specific sort of tax but of course the total level of taxation should be appropriate to generate enough income to finance your Government expenditure.’
In response, Minister for Enterprise, Jobs and Innovation Richard Bruton told journalists that the statement reflected what was contained in EU treaties and was very important.
He added he would explain why Ireland was so determined to maintain corporate tax because it was an essential element of Ireland's export strategy because, in part, investors needed certainty.
Mr Bruton said a successful Ireland trading its way out of problems was good for Europe.
McAleese praised for commitment to peace
Earlier, President McAleese was praised for her ‘enormous commitment’ to peace, by the President of the International Court of Justice, Hisashi Owada.
Mrs McAleese is visiting the United Nations’ World Court, which is based in The Hague, as part of a two-day visit to The Netherlands.
In a brief introduction this afternoon President Owada, accompanied by 12 other judges, said the ICJ recognised her ‘personal commitment to justice’, as well as her illustrious legal career at Trinity College.
Mrs McAleese said an example of the Irish Government's commitment to the rule of law was the recent decision to accept the compulsory jurisdiction of the ICJ by lodging a declaration before the end of the year.
66 states currently accept the ICJ's jurisdiction, a court which rules on disputes between states, as well as providing legal opinion to the UN Security Council.
Tonight, President McAleese will return to economic matters when addressing a meeting in The Hague.
Addressing a business lunch in Amsterdam earlier, she described the recovery as 'modest' but said it was 'good news amid the gloom.'
On foreign investment, she said 37 Dutch companies employ 2,300 people in Ireland and Irish exports in goods to the Netherlands accounted for €3bn in 2010.
The lunch was hosted by the IDA, An Bord Bia, Enterprise Ireland and Tourism Ireland.
Last month, in what were regarded as unusually direct remarks, Mrs McAleese told a Dutch newspaper in advance of this visit, that demands by France and Germany for increases in Ireland's corporation tax rates were 'a nonsense'.