Google warns against corporation tax increase

Demand rates stay despite European Union pressure

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Google has strongly warned against any corporate rate tax increase, saying that a move to increase business costs would damage Ireland’s competitiveness.

“Anything that impinges on Ireland's competitiveness is going to be a big thing for Google, including corporation tax," Google Ireland boss John Herlihy told the Irish Independent.

"And anything that increases the cost-base of a business is negative for competitiveness."

There has been speculation that the European Union will demand Ireland change its tax rate from 12.5 per cent to much higher in line with other EU countries.

At 12.5pc, Ireland’s company profit tax is one of the lowest in Europe, and now, many countries, including France, Austria and Italy, are calling on Ireland to increase it in return for an IMF/EU bailout

The low Irish corporation tax rate has long been the envy of other European countries with rates as high as 30pc, such as France.

Intel and the American Chamber of Commerce have echoed Google’s sentiments.

Government ministers have said that the tax rate would not be touched as part of negotiations for financial support from the IMF/EU, but opposition parties are worried.

"A low corporation tax rate is a cornerstone of Ireland's economy, and will play a crucial role in rebuilding the country,” said Fine Gael party leader Enda Kenny.

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