Belfast Telegraph

Noonan to defend business tax rate

Finance Minister Michael Noonan has claimed he will bring reality to the debate on corporation tax rates.

At a meeting of his Eurozone counterparts in Brussels, Mr Noonan said that other European states pushing for a hike on levies on company profits are imposing lower charges than Ireland.

"On the margins I'll be making comment and trying to inform colleagues of what the real situation is," the minister said.

Mr Noonan cited a World Bank report on 185 nations which put Ireland's effective corporation tax rate at 11.9% with the statutory figure 12.5%. He said this was one of the smallest differentials when compared to the rest of Europe.

"Many of the European countries, including France, have a much lower effective rate than that," he claimed. "If the debate is to continue I'll be pushing that it takes into account the effective rates and not the nominal rates because no-one pays the nominal rates as far as I can see."

Last week Mr Noonan claimed the effective rate in France could be as low as 8.1% as tensions on taxes deepened between the two states.

The Government insists its 12.5% corporation rate is non-negotiable as it continues efforts to secure a cut in the amount of interest being paid for the International Monetary Fund and European Union bailout deal.

French President Nicolas Sarkozy has been one of the most vocal critics of the Irish corporation tax rate and has claimed that an increase in the levy should go hand-in-hand with a cut to the interest rate.

Mr Noonan is meeting EU counterparts ahead of a leaders' summit which Taoiseach Enda Kenny will attend at the end of the week.

The minister also warned that Irish banks are expected to need more than the 10 billion euro of capital set out in the IMF-EU deal.

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