Taxation highs and low identified in EU report on policy

The report shows that Ireland is not a high tax country with total tax receipts as a percentage of GDP the lowest in the EU and the Effective Marginal Tax Rates lowest 1/3 in the EU

Even with a more than double tax subsidy for industry spending on R&D in Ireland, R&D spending is higher in the UK, caused mainly by increased spending in universities in the UK.

• In the EU Ireland scores second for the number of hours needed to comply with taxes per year, but scores badly on the length of time it takes to obtain a VAT refund at 15 weeks. The UK only takes 10 weeks.  

• Irish Environmental taxes are in the bottom five in the EU but also boast the lowest tax subsidy for company cars in the EU

• Ireland is the second lowest in the EU for the level of tax wedge for a single person earning the average wage and are lowest in the EU for tax wedge for low income earners. 

However, Ireland is ranked second from bottom for Inactivity trap for low income earners.   

A survey and report on Tax Policies in the European Union, published this week by the EU Commission, identifies areas which are in need of improvement and in need of Government policy review within Ireland’s tax system according to the Association of Chartered Certified Accountants (ACCA).   

Commenting, Liz Hughes, Head of ACCA Ireland said, 'The report provides a very useful starting point for discussion on refinement of Ireland’s tax system and while it points out many areas where Ireland scores well, it also identifies where the Government needs to work on.  

'The report shows that our R&D tax policy is flawed with the UK achieving greater R&D investment with fewer tax incentives. The report also points to a greater role for Universities in R&D.

'The Revenue Commissioner’s performance is commended within the report with the exception of the number of weeks it takes to receive a VAT refund. The existing scenario, where there is a fifteen-week delay, will become critical after Brexit due to the acceleration of VAT payments and the extended period it requires to recieve refunds.  This result points to a cash flow crisis for Irish businesses trading with the UK post Brexit, something that could be averted if action is taken now.'

'There is no room for self-congratulation in the report, it identifies that Ireland is middle of the road on many areas and bottom in some.  Where other EU countries are doing better in an area, it provides a target for Ireland to achieve.  Even where we are doing well, the Government should be striving to make further improvements,' concluded Liz Hughes.  


About ACCA

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. 

ACCA supports its 198,000 members and 486,000 students in 180 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 101 offices and centres and 7,291 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence. 

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers. 

"There is no room for self-congratulation in the report, it identifies that Ireland is middle of the road on many areas and bottom in some"

Liz Hughes - ACCA Ireland