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Ireland's 12.5 percent corporate tax rate remains and will remain a cornerstone of the country's industrial policy, Prime Minister Enda Kenny said on Thursday.
Kenny admitted that his country has the lowest general corporate tax rate in the Organization for Economic Cooperation and Development (OECD).
"This government and I as Taoiseach (prime minister) are committed to maintaining it," he said in a speech to the Dublin Chamber of Commerce Annual Dinner.
"As international tax loopholes progressively get closed down, our low general corporation tax rate will become even more attractive to business," he added.
The corporation tax in Ireland is very low and is often cited as an example of tax competition, because it is used as an incentive for foreign companies to invest in the country.
Thus, Ireland has been widely criticized by the European Union (EU) and the United States for using big tax cuts to attract profitable companies away from other locales.
In his speech, Kenny mentioned the recent announcements of the Base Erosion and Profit Shifting, or BEPS as the OECD calls it.
"At its heart, BEPS is a simple concept. It is about trying to better align taxing rights with real economic substance," he said.
"In other words, companies should be taxed where they have their substantive operations," Kenny said.
Kenny also said that his country has not been and will never be "a brass-plate location".
"We only have and want real substantive foreign direct investment the kind that brings real jobs. That's why I believe that reform in this area offers more opportunities for Ireland than risks," he said. "Ireland's package of tax, skills, and the reputation for being business friendly is a huge advantage that other countries will struggle to match," he added.
