As Finance Minister, Noonan has helped to place Ireland as Europe’s ultimate trend-setter when it comes to tax competition. He stands firmly committed to the country’s 12.5% corporate tax rate in the face of criticism and opposition from other European Union member states including France and Germany, and has created one of the most favourable intellectual property (IP) regimes in the world.
While his policy of reducing VAT for the tourism industry last year (the move to 9% was intended to be temporary but has been retained in the latest Budget announcement) is presumably being closely tracked by neighbouring Britain as a method of boosting the sector and stimulating employment. George Osborne, UK Chancellor of the Exchequer, has faced calls to include a sector-specific VAT cut in his Autumn Statement announcement.
And while many have accused Ireland of being a tax haven, Noonan also signed an intergovernmental agreement with the US regarding FATCA, which should provide certainty to Irish financial institutions and enable early understanding of compliance requirements. Noonan heralded the signing as an example of Ireland’s commitment to tackling tax evasion.
“This agreement aims to combat tax evasion by providing for the automatic exchange of tax information,” said Noonan. “Reaching such an agreement with the United States will be of benefit to Irish business.”
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