Public Consultation on a review of the Corporation Tax Code

Deloitte's Submission

On 21 February 2017 the Minister for Finance launched a public consultation process in respect of a review of the Corporation Tax Code. The public consultation closed on 4 April 2017 and Deloitte were pleased to provide our insights to the government on this important topic.

Key messages in our submission, which you can download on this page, include:

  • Consideration should be given to the significant downsides to adhering to non-mandatory BEPS provisions as part of the ongoing Multilateral Instrument (MLI) negotiations. In the case of mandatory BEPS and ATAD measures, consideration should be given to adopting the least onerous implementation options within those provisions.
  • We recommend a reform of a number of areas of the corporation tax code which are of particular relevance to companies looking to base holding, treasury or equivalent operations in Ireland
  • We recommend various measures be taken to provide taxpayers with greater certainty. These include the publication of redacted Revenue opinions, the introduction of consultation periods for key pieces of proposed tax legislation and increased Dáil debate on tax law.
  • We recommend that issues relating to supporting innovation through the R&D tax credit are addressed and to ensure that section 291A TCA 1997 can be made as attractive as possible by allowing its current amortisation continue notwithstanding financial reporting standards may not allow for amortisation into the future. 
  • We have recommended a number of measures to grow the domestic corporate sector, such as:
    1. The introduction of a notional equity deduction as suggested as part of the EU’s CCCTB proposal.
    2. Start-up companies could, by election, be treated as transparent for tax purposes for the first three years.
    3. The introduction of a refundable start-up company credit.
    4. Review of the close company surcharge.
    5. Consider following the UK in its recent reforms regarding the treatment of corporation tax loss utilisation.
  • In light of Brexit and given our key economic ties with the UK, we recommend that relieving legislation be introduced in respect of reliefs which currently require EU/EEA membership before benefits can apply.
  • Ireland should consider all necessary steps to remain a highly attractive jurisdiction from an FDI perspective, up to and including a potential reduction in the headline 12.5% corporation tax rate. 

Deloitte’s view

In a changing tax environment, it is welcome that the Minister is seeking feedback from interested parties on changes that may be necessary to enhance the attractiveness of Ireland’s corporation tax code.  It is certain that Ireland has and will implement what is required of it but the focus now needs to be on enhancing our attractiveness to investment, foreign and domestic.  Others are doing the same and this is not the time to be left behind.  

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