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Ireland’s low corporation tax: the case for tax coordination in the Union

Author

Listed:
  • Paul Sweeney

    (Irish Congress of Trade Unions, Paul.sweeney@ictu.ie)

Abstract

Ireland has been an innovator in using taxation as a tool for industrial policy, by attracting foreign direct investment (FDI) with low taxes on corporate profits. This article outlines the background to how this policy evolved and the advantage it was to building up Ireland’s industrial base during the 1990s as well as how it contributed to building the ‘Celtic Tiger’ economy from 1994 to 2000. It argues that, since EU enlargement in 2004, the advantages of using low corporate tax rates to attract FDI have diminished, even though ‘official’ and ‘corporate’ Ireland continue to promote this policy and to obstruct any EU-level moves to coordinate corporate tax. The room for manoeuvre is closing and it is argued that Ireland needs to develop alternative strategies and to engage seriously with its EU partners in finding agreement on a common corporate tax base.

Suggested Citation

  • Paul Sweeney, 2010. "Ireland’s low corporation tax: the case for tax coordination in the Union," Transfer: European Review of Labour and Research, , vol. 16(1), pages 55-69, February.
    • Handle: RePEc:sae:treure:v:16:y:2010:i:1:p:55-69
    DOI: 10.1177/1024258909357875
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    References listed on IDEAS

    as
    1. Jim Stewart, 2008. "Financial flows and treasury management firms in Ireland," Accounting Forum, Taylor & Francis Journals, vol. 32(3), pages 199-212, September.
    2. Harry Garretsen & Jolanda Peeters, 2007. "Capital Mobility, Agglomeration and Corporate Tax Rates: Is the Race to the Bottom for Real?," CESifo Economic Studies, CESifo Group, vol. 53(2), pages 263-293, June.
    3. Stewart, Jim, 2008. "Financial flows and treasury management firms in Ireland," Accounting forum, Elsevier, vol. 32(3), pages 199-212.
    4. Philip Lane, 1998. "Profits and Wages in Ireland, 1987-1996," Economics Technical Papers 9814, Trinity College Dublin, Department of Economics.
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