Corporation Tax refund scheme

partyatmygaff

As I posted in a thread on the Budget '11 forum

partyatmygaff wrote: »

I really like the sound of idea No.2 but no way would the EU allow it.

There could be a workaround though. Let's say that a company starting up in Ireland and creating 100 jobs is made pay 10% corporation tax. Instead of lowering the corporation tax directly, why not give say 50% of the corporation tax received back as a grant for the first ten or so years of a company's start up?

For example it could work as follows

• All companies pay 10% in corporation tax per annum
• Those creating 0-100 jobs get a yearly grant for ten years worth 15% of their corporation tax paid
• Those creating 100-250 jobs get a yearly grant for ten years worth 30% of their corporation tax paid
• Those creating >250 jobs get a yearly grant for ten years worth 50% of their corporation tax paid

So a practical example, a corporation opens up in Ireland and creates 250 jobs in the process. They have a taxable profit of €10m. Therefore they pay a corporation tax of €1m per annum leaving their net profit at €9m. The government receives the €1m per annum and issues the company with a grant of €500,000 therefore leaving the corporation with a net profit of €9.5m. The process continues for ten or so years. Therefore, effectively, the corporation pays corporation tax at a rate of 5% for ten years.

Good idea?

That sounds a rather attractive offer for any multinational that would create many new jobs.

partyatmygaff

No comments?

arodabomb

I'd be all for that. I imagine the EU (Germany/France) might not have the same view. The more high level investment we can attract the better imo.