Business groups were largely critical of the provisions in yesterday's Finance Bill, with the Institute of Chartered Accountants in Ireland (ICAI) saying it affirmed the budget changes but little else, writes John Collins.
The ICAI said it focused on anti-avoidance and "tidy up" measures for existing tax law.
"There will be some disappointment that measures necessary to enhance Ireland's position as a destination for foreign direct investment are not contained in the Bill," said Brian Keegan, ICAI director of taxation.
Consultants Deloitte were more critical and said it did not go far enough in making Ireland a favourable location for knowledge-based investment.
"In the context of Ireland's agenda for a knowledge economy, Finance Bill 2008 does not focus on any tax deduction for acquired intellectual property and indeed amends a long-standing provision, 'know-how', which is negative in the context of marketing Ireland as a favourable location," said Deloitte tax partner Joan O'Connor.
She also said the measures in relation to research and development, which extended 2003 as the base year for measuring increases in investment, does not go far enough to alleviate investor uncertainty with regards to Ireland.
Deloitte also said the new VAT on property rules contained in the Bill, which runs to 27 pages, would be challenging for builders, developers, investors and even Revenue itself, to implement.
The Irish Banking Federation (IBF) was more inclined to find positives in the Bill. It welcomed the new regime for the taxation of dividends received by Irish companies from non-resident companies.
In a statement, the IBF said: "The new regime should help to better attract headquarters and holding company operations to these shores - with consequent add-on value to the wider economy in terms of business activity and employment."
The American Chamber of Commerce in Ireland welcomed the extension of the 12.5 per cent corporate tax rate to Irish holding companies.
Business group Ibec saw a number of positives in the Bill. It highlighted the scheme to encourage the purchase of energy efficient equipment and changes to aspects of corporation tax as being beneficial to employers.
