The Government has made clear that it will accept no change to its policy on Corporation Tax.

In a short statement, released by the Department of Finance, the current rate of 12.5 % Corporation Tax is described as “a cornerstone of the Irish industrial policy”.

The statement comes in the wake of comments by the European Commissioner Olli Rehn, which are being interpreted to mean that Ireland should be flexible on the issue of tax, including Corporation Tax, as it tries to get its public finances in order.

The Finance Minister Brian Lenihan has responded by accepting that taxation will play it part in restoring balance, but he insists our Corporation Tax policy is “protected”.

Read the short full statement…

Commissioner Rehn made comments this morning in relation to taxation levels generally in Ireland.

The Minister has acknowledged that taxation will form part of the solution to our fiscal problems and stabilising the deficit.

With regards the corporation tax rate, the Government has always made it clear that the corporation tax rate will remain at 12 ½ % as set out in the Programme for Government. This is still the case. This commitment is protected, in an EU context, by the principle of unanimity in taxation matters. That was further enhanced by the insertion of a legal guarantee in the Lisbon Treaty. The 12 ½ % corporation rate is a cornerstone of the Irish industrial policy.