Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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To ask the Minister for Finance further to Parliamentary Questions Nos 189 and 190 of 16 October 2012, the reason his claim that the effective corporation tax rate is 11.9% when in answer to Parliamentary Questions, his answer showed total manufacturing profits in 2012 at €28,762 million and other trading profits at €41,196 million and a total income figure at €61,034 million, whereas total corporation tax paid was €4,246 million suggesting a far lower effective tax rate; and if he will make a statement on the matter. [1738/13]

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy has already been advised in Parliamentary Question 190 referred to above, there is no agreed international methodology for calculating the effective rate of corporation tax. In the same answer, to illustrate the debate on the topic, I referred to an estimate from a report produced by the World Bank and PriceWaterhouseCoopers which put the effective rate in Ireland at 11.9% (Paying Taxes, 2013). This comparative report looked at 183 countries and calculated the effective rate based on the tax obligations of a standardised company operating in each country, using standard assumptions regarding exemptions, deductions and allowances. I also referred to a study by the European Commission (Taxation Trends in the EU 2011 ), which indicates Ireland has an effective corporate tax rate which is close to or indeed higher than the statutory 12.5% rate (this is likely because of the 25% rate that applies generally to non-trading income).

I have been clear that my Department does not take ownership of these reports, but rather have quoted them to give the Deputy an example of the differences that exist in comparative studies on effective tax rates, depending on how the rate is calculated or who carries out the calculation.

Regarding the figures that the Deputy is referring to in the question above, I should clarify that the figures given in response to Parliamentary Questions 189 and 190 related to 2010 and not 2012.

Such data is contained in the Statistical Reports which are published annually by the Revenue Commissioners on their website – www.revenue.ie . The Deputy should be made aware that manufacturing and trading profits quoted in the question are the amounts of trading profits before certain trade-related deductions and charges are deducted to arrive at taxable profits, the figure on which the charge to tax is initially assessed on a gross before credits basis. The amount of taxable profits on which gross corporation tax was assessed for the year 2010 was €41,215.6 million and gross tax was €5,422 million.

Furthermore, it should be noted that certain credits are deducted after the calculation of gross corporation tax. Some of the main credits applicable in the tax year 2010 and deducted after the calculation of gross tax were double taxation relief, manufacturing relief, credit for withholding tax on fees and research and development tax credit. The total net corporation tax which emerged after discounting for all credits was €4,246 million.

I would refer the Deputy to the tables contained in the response to Parliamentary Question 1739, which will shortly be published in the 2011 report on the website of the Revenue Commissioners and which set out the corporation tax figures for 2010 in full.