A new report from PwC and the World Bank found Ireland had one of the most efficient company tax systems in the world and the best in Europe when it came to total taxes on business and the time involved in satisfying its regulations.
Across western Europe last year, the average total tax rate, which includes taxes on profits, labour, property, vehicles and other tariffs, was 41% and compliance time stood at 176 hours.
In comparison, Ireland’s total tax rate was only 25.9% and the amount of time it took to complete the necessary paperwork was only 80 hours.
Just under half, or 12.4%, of the total tax bill for companies in Ireland came in taxes on profits. That figure is just under the Republic’s headline corporate tax rate of 12.5%.
But although Ireland’s low tax rate has been criticised for forcing a “race to the bottom” as European countries compete to attract corporate investment, the report found the taxes levied on profits across the region were little higher – only 13.1% on average.
It was in much higher labour taxes that other countries made up the balance of their higher tax bills, with the Europe-wide average for these tariffs sitting at 26.3%, compared to 12.1% in the Republic.
Stick that in your pipe and smoke it, Monsieur Sarkozy.