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The Double Irish is dead, long live the 'knowledge-development box'

But Michael Noonan says Ireland’s low corporate tax rate “never was, never has been” up for discussion.

MICHAEL NOONAN WILL close the controversial Double Irish tax loophole but will pitch a new “knowledge-development box” to lure business investment instead.

In his Budget speech today, the Finance Minister said he would pull the shutters down on the internationally-criticised tax loophole which multinational companies like Google have exploited to shift millions in profits offshore virtually tax-free.

Noonan said from next year all new companies which were registered in Ireland would also need to be tax resident in the country.

Companies set up under the existing scheme would need to comply with the laws before the start of 2021, he said.

He said the new arrangement would “align with best practice internationally” and the government wanted to support companies creating “real jobs” in Ireland.

“By taking action now and making this change as part of our broader reform of the corporate-tax system, we are creating certainty for investors,” he said.

Double Irish death won’t stop tax avoidance

Noonan added the move would not stop international tax avoidance single handedly, a nod to the OECD’s ongoing work to draw up a framework to deal with the problems of multinationals using differences in countries’ tax laws to whittle down their bills.

But he said Ireland’s headline 12.5% corporate tax rate was “at the heart” of its foreign, direct-investment strategy and that was off the table when it came to any tax changes.

“The 12.5% tax rate never has been and never will be up for discussion,” he said.

Minister for Finance Michael Noonan arr Leon Farrell / Photocall Ireland Leon Farrell / Photocall Ireland / Photocall Ireland

A patent… sorry, ‘knowledge’ box

Noonan also announced the government would introduce a “knowledge box” next year after consultation on the plan.

The move would put Ireland in line with countries like the UK and Netherlands which already had generous patent-box tax deals in place to lure investment for research and new products.

READ: Explainer – What is this ‘knowledge box’ and why does Ireland want to get one? >

“(It will be) best in class and at a low, competitive and sustainable tax rate,” Noonan said.

Since last year, the UK has been phasing in a discounted corporate tax rate of only 10% on profits stemming from new patents, although the European Commission is currently looking at patent-box schemes to see if they constitute illegal state aid.

Changes welcome, but what’s with the six-year wait?

While the government’s move to stamp out the Double Irish tax dodge was widely praised, Noonan drew criticism for factoring in a six-year phase-in period for existing companies as part of the deal.

The Debt and Development Coalition Ireland (DDCI) said the proposed patent box scheme would not support real innovation if it was anything like the UK scheme.

“The government is playing musical chairs on corporate tax; while it is welcome that the ‘Double Irish’ scheme will be closed, the phased approach to its closure provides corporations with 6 years to avail of new tax-dodging mechanisms,” DDCI’s Nessa Ní Chasaide said.

Business group Ibec’s CEO, Danny McCoy, said it was a good Budget for jobs and growth and the government had “responded assertively to the changing global tax environment”.

“Ireland has sent out a clear signal that we will continue to compete aggressively for mobile investment,” he said.

“The knowledge development box is an ambitious new initiative to improve our intellectual property tax offering.”

READ: ‘Double Irish’ tax loophole in the firing line >

READ: Enda Kenny: The ‘Double Irish’ tax loophole isn’t our fault and we don’t promote it >

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5 Comments
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    Mute Malachi Shanks
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    Oct 3rd 2019, 9:42 AM

    “The wind warning for Ireland is valid until 6pm this evening” ?? I thought 6pm was when the shi t was going to hit the fan ??

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    Mute Ciarán Ó Fallúin
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    Oct 3rd 2019, 10:06 AM

    @Malachi Shanks: They’d want to take a sharpie to that sentence good and quick.

    67
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    Mute Gisbert Bayertz
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    Oct 3rd 2019, 1:00 PM

    @Malachi Shanks: because the storm loses most of its strength as it crosses the country

    9
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    Mute John gaughan
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    Oct 3rd 2019, 10:21 AM

    I have a feeling they don’t know what they are talking about
    Tonight at around 2200 hours will be the worse time with the high tides and if it’s West or south west gale’s for the west coast I live on the west coast and I have seen storms a lot worse than this so called tropical storm and no warns given about the strength of them
    Remember hurricane Stephen 110 miles recorded
    Now they have the army coast guard’s navy Garda met eirrenn the government and God knows how many more given out about 100km wind’s
    On saying that it’s not safe to venture out near the sea in high tides and windy conditions
    Stay safe folks until this gale passes by

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    Mute Ricky
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    Oct 3rd 2019, 11:48 AM

    @John gaughan: exactly John… I’m not a meteorologist but i don’t like the look of it, if this is just a yellow wind warning. We’re told it won’t be as bad as Ophelia but that wasn’t as bad in places.
    Hopefully it won’t reach over 100km.

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    Mute Paul Furey
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    Oct 3rd 2019, 1:02 PM

    @John gaughan: they know exactly what they are talking about. They know they cant be 100%, they know itll be bad in places and are telling everyone to be prepared….just in case. Its already a bit rough around the east coast and we’re no where near where it’s likely to hit. So give over on your whinging and take charge of the operation….as you appear to be best qualified.

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    Mute John gaughan
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    Oct 3rd 2019, 2:12 PM

    @Paul Furey: yes I know what I am talking about plus I am not whinging just stating a few facts
    No one can predict the exact strength of the exact Couse of this gale maybe storm
    I can assure you if this storm was hitting the East coast the country would be on lockdown
    So you stay safe in that breeze

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    Mute Yolanda Squatpump
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    Oct 3rd 2019, 2:15 PM

    @John gaughan: Ah now in fairness the country would be treated the same if this storm was hitting the East Coast. Bit of a mad statement tbh

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    Mute Stephen
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    Oct 3rd 2019, 4:46 PM

    @John gaughan: you sound like an idiot.
    You say you “have a feeling they don’t know what their on about”
    Lord Jesus what next

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    Mute Paul Dooley
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    Oct 3rd 2019, 8:05 PM

    @John gaughan: yea Stephen roche
    He was great on a he hills too

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    Mute bozharry
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    Oct 3rd 2019, 9:48 AM

    Beer and bread at the ready.

    56
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    Mute Paul Furey
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    Oct 3rd 2019, 10:23 AM

    @bozharry: you’re new here? You probably dont realise that bread is hilariously referred to here….all the time. Good man.

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    Mute bozharry
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    Oct 3rd 2019, 10:49 AM

    @Paul Furey: i Love the Bread.

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    Mute kevinhunt101
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    Oct 3rd 2019, 12:38 PM

    @Paul Furey: also is the bread shortage due to the snow, where did a bit of wind come into bread shortages?

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    Mute Will Thompson
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    Oct 3rd 2019, 5:07 PM

    @bozharry: Beer on Bread, save time for when s**! hits the fan!

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    Mute Dermot Quinn
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    Oct 3rd 2019, 1:33 PM

    Looks like rain, Ted.

    52
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    Mute Dermot Browne
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    Oct 3rd 2019, 12:17 PM

    RTE post warnings on their News page, to stay away from shorelines then show a selfie from their Kerry Correspondent doing exactly the opposite?

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    Mute Levante Dublin
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    Oct 3rd 2019, 10:09 AM

    Yeesss, 6 northern counties are still not going to be affected.

    48
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    Mute joe
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    Oct 3rd 2019, 10:13 AM

    @Levante Dublin: why would you care about the weather forecast in another country?

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    Mute Ed
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    Oct 3rd 2019, 10:23 AM

    @Levante Dublin: Check the UK Met Office.

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    Mute Paul Furey
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    Oct 3rd 2019, 10:24 AM

    @joe: oooooo many dreamers wont like that:)

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    Mute Liam Carlin
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    Oct 3rd 2019, 10:31 AM

    @Levante Dublin: well yeah most of em are looking at weather forecasts from 1690

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    Mute Ed
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    Oct 3rd 2019, 10:22 AM

    A grand soft day

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    Mute Ed
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    Oct 3rd 2019, 1:00 PM

    It’s amazing that people need to be told to stay away from the coast.

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    Mute Philip King ⚡️
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    Oct 3rd 2019, 1:38 PM

    @Ed: probably better to tell them to go for walk round the harbour or maybe a nice hike up the mountains.
    You know they will stay at home then!

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    Mute The Red Devil
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    Oct 3rd 2019, 1:01 PM

    Sorry is it just me or is Evelyn Cusack not good at getting info across

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    Mute Mike Conway
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    Oct 3rd 2019, 1:20 PM

    This storm was scaremongering over nothing again.

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    Mute thomas patrick
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    Oct 3rd 2019, 1:32 PM

    @Mike Conway: Surely its better to have people over prepared and safe, rather than under prepared and dead?

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    Mute Paul Furey
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    Oct 3rd 2019, 4:05 PM

    @Mike Conway: feeling stupid now? Get yourself a job in the met office. You know it all

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    Mute Paraic
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    Oct 3rd 2019, 5:55 PM

    @Mike Conway: Your comment is way premature. Not going to see it’s force until later tonight.

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    Mute Lisa
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    Oct 3rd 2019, 1:09 PM

    Don’t take any unnecessary journeys.

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    Mute Fiona Fitzgerald
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    Oct 3rd 2019, 2:27 PM

    Don’t take risks on treacherous roads…

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    Mute Paraic
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    Oct 3rd 2019, 4:54 PM

    @Fiona Fitzgerald: AND DON’T SWIM IN THE SEA!!!!!!!

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    Mute Marie O'Shea
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    Oct 3rd 2019, 9:30 AM

    I think you mean South Westerly winds NOT South easterly.

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    Mute Alan Carthy
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    Oct 3rd 2019, 9:43 AM

    @Marie O’Shea: seems to be southeastly at the moment in wicklow’/dublin area

    23
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    Mute Siouxie Ní Chailleach
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    Oct 3rd 2019, 10:21 AM

    @Marie O’Shea: coming from the south east in Kerry at the moment..it’s wicked

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    Mute Darren Byrne
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    Oct 3rd 2019, 10:25 AM

    @Marie O’Shea: Its spinning anti clockwise, winds over Ireland are pulling in air from the south east. https://twitter.com/metoffice/status/1179333407760949249
    Maybe look for your money back on the meteorological degree.

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    Mute Marie O'Shea
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    Oct 3rd 2019, 2:42 PM

    @Alan Carthy: I live in the south west and that is the wind direction here

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    Mute Marie O'Shea
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    Oct 3rd 2019, 2:44 PM

    @Darren Byrne: I live in the south west and that is the wind direction here. In another report else where it’s also states southwesterly.

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    Mute Alan Carthy
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    Oct 3rd 2019, 4:59 PM

    @Marie O’Shea: ya done need a report to ses were its blowing just look at the winds
    Or if in a city look at what way the cranes are facing n it the direction its blown

    2
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    Mute Support Cancer research
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    Oct 3rd 2019, 11:11 AM

    Latest forecast for storm lorenzo
    https://youtu.be/x8blH6AE4JQ

    12
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    Mute J
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    Oct 3rd 2019, 4:05 PM

    We should all just gather in Athlone

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    Mute Gerard hayes
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    Oct 3rd 2019, 3:59 PM

    Good day for the drying..

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    Mute Gerard hayes
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    Oct 3rd 2019, 3:59 PM

    @Gerard hayes:

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    Mute Ricky
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    Oct 3rd 2019, 4:05 PM

    ‘There’ll be something in the air tonight, the air will be wild, Lorenzo…’

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    Mute Ciaran Farrelly
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    Oct 3rd 2019, 6:24 PM

    I think I’d believe what a politician tells me more than the weather forecast these days. Drama free get nothing as usual.

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    Mute ed w
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    Oct 3rd 2019, 5:31 PM

    oh get lost

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