Michael Noonan (Limerick City, Fine Gael)

More than 28,000 companies pay tax at the 12.5% rate but the Deputy wants to know how many pay smaller amounts. I do not have the precise figures to hand and I do not think anybody does. In general terms, there are few allowances but the tax is levied on profits. Obviously companies can deduct costs before the tax break arises. The one break of which I am aware was introduced in the Finance Bill 2004 and allows write-offs for research and development. This has proved attractive to companies setting up here.

The normal course for a company is that it incurs significant costs when it initially sets up operation here and, as such, pays little tax over the first several years while it offsets these costs. Once it is established it comes up to the 11.9% rate, which is the standard rate paid, as against the nominal rate of 12.5%.

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