Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The introduction of the exit tax regime is an important development in ensuring that our corporate tax policy continues to meet the evolving international standards in respect of corporation tax policy. I explained on Committee Stage that the reason I was making this change at 12.5% was to bring it into line with the main trading rate of corporate tax. I also made the point that, though many more countries have yet to bring in the regime, the norm in many of the other EU member states that have brought it in has been to anchor the exit tax rate to the existing corporate tax, which is what I have done. They are the reasons I have made that change. If they do not convince the Deputy, that does not take away from the fact that this is the argument why I have done this and why I believe it is the correct rate to use.

It would not be appropriate to tax an unrealised gain at a higher rate as is suggested by the Deputy's amendment for a number of reasons. The first is that the companies subject to the charge may have no intention of disposing of the asset and may, therefore, not actually realise any gain. The second reason is that the asset that is migrating might fall in value following migration, in which case a high rate of tax could well have been paid on a temporary value fluctuation. I acknowledge that the Deputy welcomes the fact that we are bringing in a regime. He clearly disagrees with the rate but I believe anchoring it to our existing corporation tax rate is appropriate.

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