Ryanair warns investors on threat to corporation tax rate
Michael O'Leary's Ryanair has warned its investors of a potential threat to Ireland's crucial 12.5 per cent corporate tax rate.
"Irish Corporation Tax Rate Could Rise," it warned in its annual report last week. "Due to the size and scale of the Irish government's budgetary deficit and the bailout of the Irish government by a combination of loans from the International Monetary Fund and the European Union, there is a risk that the Irish government could increase Irish corporation tax rates above 12.5 per cent in order to repay current or future loans or to increase tax revenues."
It added, "At 12.5%, the rate of Irish corporation tax is lower than that applied by most of the other European Union member states, and has periodically been subject to critical comment by the governments of other EU member states. Although the Irish government has repeatedly publicly stated that it will not increase corporation tax rates, there can be no assurance that such an increase in corporation tax rates will not occur."
"In the event that the Irish government increases corporation tax rates or changes the basis of calculation of corporation tax from the present basis, any such changes would result in Ryanair paying higher corporate taxes and would have an adverse impact on our cash flows, financial position and results of operations." Last year Ryanair had an effective tax rate of 11.5 per cent, up from 11 per cent a year earlier.
Last week Gulf airline Etihad indicated that it would be interested in buying Ryanair's stake in Aer Lingus.
Sunday Indo Business