Why Ireland will be among those most wary of America’s push for global corporation tax rate

Why Ireland will be among those most wary of America’s push for global corporation tax rate

Tax competition is a relatively young phenomenon.Its rise can be dated to the 1990s when, as restrictions on the movement of capital around the world were loosened, governments realised they could attract businesses and jobs by setting a corporate tax rate lower than that of their neighbours.

The Republic of Ireland, which currently has a corporate tax rate of 12.5%, is a good example of a country that has attracted billions of dollars in foreign direct investment on the back of tax competition.Ireland, whose low corporate tax regime actually dates all the way back to 1956, is reckoned to have attracted more than 700 companies from the US alone to its shores as a result of the policy.It has gained momentum as more countries have shifted to service-based economies in which businesses increasingly use fewer 'tangible' assets like buildings and machinery and more 'intangible' assets like intellectual property. The