Property consultant CB Richard Ellis has welcomed confirmation from the Irish government in their four-year financial plan that the 12.5% corporation tax rate is to be maintained.
Property consultant CB Richard Ellis has welcomed confirmation from the Irish government in their four-year financial plan that the 12.5% corporation tax rate is to be maintained.
Marie Hunt, executive director at CBRE Ireland, said: 'Ireland has attracted more than its fair share of corporate occupiers over the last 10 years, which in turn has brought thousands of jobs to this country. Much of this investment has been attracted by the 12.5% corporation tax rate.
'Many or these large employers have been threatening to leave Ireland if this rate was increased as has been speculated on in recent weeks. While in many respects, the 4 year plan announced today is harsh and will reduce everyone’s standard of living over the next number of years, we welcome the fact that we now have conformation from Government that the corporate tax rate is to be maintained and that we have certainty on what cuts are coming down the line. The focus now is to ensure that we maximise our competitive advantage in an effort to stimulate job creation.'
However, many of the measures announced, according to CBRE, will have repercussions for the property market, particularly plans to shrink the public sector, increase the VAT rate, cut capital spending and introduce a site value tax. However, they acknowledge that without taking these difficult decisions, the Irish economy will be unable to move beyond this point.
CBRE says that the measures announced in the plan will have severe consequences for all sectors of society over the next four years. The property consultant recently prepared a report comparing the office market in Dublin with a number of cities that the capital competes directly with for foreign direct investment and international office occupiers, namely Birmingham, Manchester, Edinburgh, Glasgow, Amsterdam and Belfast. This study found that Ireland attracted a greater proportion of overseas occupiers than other jurisdictions and that a large number of the multinationals that set up new operations in Ireland over the last decade did so because of this 12.5% corporation tax rate and assurances that the rate would not be changed.