According to a study from PwC and the World Bank this morning, Ireland has the most efficient corporate tax regime in Europe with the least amount of red tape. The country's effective rate comes in pretty much on target with our advertised rate at 12.4%. This coincides with news that the common consolidated corporate tax base has come back onto the political agenda in Europe.
Brian Keegan, Director of Taxation at Chartered Accountants Ireland, said the idea of the CCCTB was first mooted well over a decade ago, in 2000, but is now making a comeback. "The notion is that if you had a company which was operating in a group across a number of EU states, all the companies would use the same set of rules for calculating tax and the profits would be apportioned across the states," he explained.
Brian Keegan pointed out that the proposal was always regarded with some level of scepticism here because we rely heavily on the corporate tax regime to drive inward investment. "We collect a lot of corporate tax from our companies. Germany, France and Italy don't collect nearly as much corporate taxes as we do pro-rata," he stated. The system would conceivably replace the existing regime and would see profits being distributed by reference to markets, employment and investment. "That would work well for countries with big markets, but for countries with small markets it doesn't work so well."
The UK would be one of the big beneficiaries, but Germany would lose out. "In general, countries have been fairly quiet as to whether or not they were favourably disposed towards these plans. As long as that tension is there, it would be hard to see individual ministers agreeing to something that would cost them tax revenue so the question remains as to why the EC raising this issue again," he concluded.
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MORNING BRIEFS - Food and agribusiness group Origin has reported first quarter revenues of €318m, a 3.5% increase on its position in the same period last year. The increase was driven by favourable currency movements and merger and acquisition activity. Underlying revenues was down just over 5.5% driven by lower global fertiliser and feed prices.
*** The specialist healthcare recruitment group, TTM healthcare, is to create 100 new jobs as part of a €5m investment in its operations. Most of the jobs will be at its headquarters in Ennis but they will be recruiting some for their Cork, Dublin, London and Berlin offices. The jobs will come on stream over the next three years and will be in the areas of compliance and recruitment consulting, and sales.
*** Asian markets are trading higher this morning, buoyed by an unexpected rate cut introduced by China's central bank on Friday. It has sparked hopes that more action might be forthcoming. Investors were also cheered by Mario Draghi's renewed commitment to fight inflation across the euro zone. The euro is at a two and a half year low having lost over a percent late last week when Mario Draghi recommitted himself to fighting inflation.
