Irish General Election 2024: The Future of Ireland’s FDI Policy
Ireland’s corporation tax regime has been an instrumental part of the country’s economic policy, attracting significant foreign direct investment. This approach, along with other factors such as a skilled workforce, regulatory environment, and attractive location within the EU, has positioned Ireland as a location of choice for many multinationals, resulting in Ireland having a budget surplus. In recent years, these policies have faced increased scrutiny amid global efforts to reform corporate tax, including the OECD’s BEPS initiative and the adoption of a global minimum tax rate of 15%, which Ireland signed up to. As the global taxation landscape continues to shift, Ireland faces balancing its international relationships while maintaining tax sovereignty and competitiveness. Here, we take a look at how political parties plan to address corporation tax, while safeguarding foreign direct investment and promoting economic growth.
Fine Gael
Ireland’s corporate tax regime is essential for attracting foreign direct investment. While we are committed to the OECD global framework for corporate tax, we will uphold our tax sovereignty.
Strongly protect Ireland’s corporate tax framework from attempts at harmonisation or indirect changes.
Insist that tax policy continues to be determined in Ireland, safeguarding our unique tax landscape.
Launch an Action Plan for Competitiveness, which will integrate wage policy, tax policy, education and training, energy and utility policy, and digitisation.
Establish a Research Infrastructure & Talent Fund.
Prioritise economic competitiveness in the EU, to ensure that Europe moves swiftly to keep pace internationally and improve the standard of living for all citizens.
Design regulatory and legal frameworks for data security to position Ireland as the most secure location within the EU for data storage, management, and services.
Work with other EU member states to ensure the fair application of state aid regulations.
Increase participation in Important Projects of Common European Interest (IPCEI), to boost competitiveness and productivity for Irish companies.
Fianna Fáil
Implement a pro-enterprise tax policy, supporting long-term investments in high-quality jobs.
Review the Business and Enterprise Tax system to ensure simplification is prioritised to better support indigenous business and FDI.
Expand and broaden the R&D tax credit to include innovation and digitalisation.
Emphasise progressive changes in tax and encouragement of long-term economic strength.
Support international trade, reduce costs of exporting and secure access to international markets for Irish businesses.
Ensure that a minimum of 60% of IDA Foreign Direct Investment goes to regional locations.
Sinn Féin
Support the OECD international tax agreement for those companies in scope and maintain a corporation tax rate of 12.5%.
Defend tax sovereignty and resist any attempts to cede any element of that sovereignty to the European Commission. Taxation must remain the sole competency of member states.
Ensure that all international partners are confident that our tax code will be applied in a fair and transparent manner.
Engage internationally to cooperate and promote effective reforms of the international taxation system and tackle financial secrecy.
Deliver the right set of enabling conditions to support FDI, including capital infrastructure projects in terms of energy costs and energy security, water infrastructure, renewable energy provision, to guarantee Ireland’s competitiveness and a steady pipeline of world class talent.
Continue to secure a flow of high-impact American FDI and projects.
Secure FDI from new markets, with a specific focus on Europe, Middle East, and Asia.
Create the conditions to secure FDI in key knowledge-intensive sectors.
Maximise the impact of FDI across the state and ensure investments help advance regional development.
Green Party
Ensure future competitiveness through appropriate participation in Important Projects of Common European Interest in areas such as hydrogen, batteries, microelectronics (computer chips), and healthcare.
€200 million for a programme of research and innovation for clean technologies.
Establish an agency to attract skilled workers from abroad, copying IDA Ireland’s model for attracting investment. This ‘IDA for skills’ will help people to find a job in Ireland, with a particular focus on public service positions, and support with re-location costs. It will operate globally, attracting people from diverse backgrounds.
Labour
Support the implementation of Pillar 1 and 2 of the OECD BEPS2.0 and maintain the domestic 12.5% rate and 15% minimum effective corporation tax rate on large corporate groups.
Invest in talent and skills, and resource our education and training system.
Retain the strengths of the FDI sector in a more challenging tax and trading environment and build a dynamic indigenous sector capable of complementing the role of FDI in our economy.
Social Democrats
Multinational companies provide significant employment, particularly at the higher end of the income distribution, and provide a disproportionately high share of corporation tax and value added in the economy. We must ensure Ireland’s success in this area continues, in particular by investing in housing and other infrastructure necessary to support continued growth.
Invest to improve Ireland’s economic infrastructure, particularly telecommunications, transport and port infrastructure.
Ensure increased investment in education, to maintain the strategic advantage we have in this area as an attractor of Foreign Direct Investment.
Consider the use of an Industrial Policy Commission to select priority areas for industrial research clusters (e.g. cybersecurity, or certain areas of energy), where additional resources and supports will be directed.
For more information, please reach out to the FTI Consulting Dublin team.
The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.
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