Ireland has the smoothest tax system for businesses in the EU

And the fifth most efficient in the world according to a new report...

2015, settlements, revenue, default, tax, payments


Ireland continues to be most effective country in Europe in which to pay business taxes - and the fifth most effective worldwide.

This means that Ireland's tax system continues to be the most efficient in the EU in terms of bureaucracy and administrative burden when it comes to paying, filing, time spent and the amount of tax levied on businesses according to the PwC/World Bank Group report.

The study notes that efficient tax regimes create a business-friendly environment, which in turn is a driver of economic growth.

When you factor in the range of taxes that businesses pay such as taxes on profits, on their employees, and in terms of assets such as rates and motor tax - Ireland comes in at a rate of 26% as against an EU average of 40%.

Ireland's headline rate on profits is broadly similar to the effective rate. This is not the case everywhere as regions with high headline rates often have significantly lower effective rates.

In France where the statutory rate is 33%, the effective rate can be as low as 0.4% - and in a world looking for greater transparency the clarity of Ireland's low-tax system should improve Ireland's credibility as a country to do business in.

Economic analysis undertaken by PwC shows that economies where action was taken to reduce complexity in tax administration – both in terms of the number of payments and the time taken with tax matters - there tends to be higher economic growth.

The top 10 worldwide economies for ease of paying taxes are, in order:

  1. Qatar and United Arab Emirates (joint first)
  2. Hong Kong
  3. Bahrain
  4. Ireland
  5. Kuwait
  6. Denmark
  7. Singapore
  8. Macedonia
  9. United Kingdom.

Speaking at the launch, Joe Tynan, PwC Ireland’s Head of Tax, said: "Post BEPS the focus will be on the tax rate, economic substance and people and Ireland scores well on all three. The report confirms that Ireland is competitive on corporate taxes but also on the costs of employing people.

"International companies are looking for a sustainable tax model and this report highlights that Ireland has just that.  Ireland is an ideal location providing certainty on tax as well as other important advantages such as access to a large market, a large pool of talented people having a stable political outlook."