·         The report shows that Ireland is not a high tax country with total tax receipts as a percentage of GDP the lowest in the EU and the Effective Marginal Tax Rates lowest 1/3 in the EU

·         Even with a more than double tax subsidy for industry spending on R&D in Ireland, R&D spending is higher in the UK, caused mainly by increased spending in universities in the UK.

·         In the EU Ireland score second for the number of hours needed to comply with taxes per year, but score badly on the length of time it takes to obtain a VAT refund at 15 weeks. The UK only takes 10 weeks. 

·         Irish Environmental taxes are in the bottom five in the EU but also boast the lowest tax subsidy for company cars in the EU

·         Ireland are the second lowest in the EU for the level of tax wedge for a single person earning the average wage and are lowest in the EU for tax wedge for low income earners. However, Ireland are ranked second from bottom for Inactivity trap for low income earners.   

A survey and report on Tax Policies in the European Union[i], published this week by the EU Commission, identifies areas which are in need of improvement and in need of Government policy review within Ireland’s tax system according to the Association of Chartered Certified Accountants (ACCA).  

Commenting, Liz Hughes, Head of ACCA Ireland said, “The report provides a very useful starting point for discussion on refinement of Ireland’s tax system and while it points out many areas where Ireland scores well, it also identifies where the Government needs to work on. 

“The report shows that our R&D tax policy is flawed with the UK achieving greater R&D investment with fewer tax incentives. The report also points to a greater role for Universities in R&D.

“The Revenue Commissioner’s performance is commended within the report with the exception of the number of weeks it takes to receive a VAT refund. The existing scenario, where there is a fifteen–week delay, will become critical after Brexit due to the acceleration of VAT payments and the extended period it requires to recieve refunds.  This result points to a cash flow crisis for Irish businesses trading with the UK post Brexit, something that could be averted if action is taken now.”

“There is no room for self–congratulation in the report, it identifies that Ireland is middle of the road on many areas and bottom in some.  Where other EU countries are doing better in an area, it provides a target for Ireland to achieve.  Even where we are doing well, the Government should be striving to make further improvements,” concluded Liz Hughes.