Trump's claim of Irish corporate tax cut is 'fake news', says prime minister

The Irish prime minister has accused Donald Trump of peddling “fake news” after the US president wrongly claimed that Ireland plans to further reduce its much-criticised 12.5% corporation tax.

Trump angered Irish officials with his comments at a White House briefing on Monday, in which he alleged that Ireland was going to cut the tax on corporations such as Apple, Google and Facebook to 8%.

“I hear that Ireland is going to be reducing their corporate rates down to 8% from 12,” Trump told reporters.

But the taoiseach, Leo Varadkar, denied the allegation during prime minister’s questions in the Dail (Irish parliament) on Wednesday.

“I can confirm that President Trump’s claim that we are proposing to reduce our corporation profit tax to 8% is indeed fake news. There is no such plan to do so,” Varadkar said in response to a parliamentary question.

Ireland’s low 12.5% corporation tax has been used as key fiscal policy to attract some of the world’s largest multinationals to the country.

The likes of Apple, Microsoft and other mainly US corporations flock to Ireland to use it as a beachhead into the European market. But fellow EU states such as France have criticised the 12.5% rate, accusing the Irish of bribing multinationals with low-tax sweeteners.

Successive Irish governments have robustly defended the 12.5% rate, arguing that it has created hundreds of thousands of jobs through foreign direct investment.

In response to the latest criticism of the tax rate from across the Atlantic, Varadkar said: “Our corporate profit tax is 12.5%, has been for a very long time through changes of government, through recessions and through periods of growth, and it is as much that certainty that is as important to business as anything else.”

Trump has argued that the United States should reduce corporation tax at home to 20% to stop the flight of American multinationals, often from the hi-tech or big pharma sectors, from relocating to Ireland.

The United States has also recently come under criticism in Northern Ireland over plane-making giant Boeing’s attempt to have import tariffs imposed on rival Bombardier because the latter receives state support.

Boeing’s legal actions in the US have put in peril up to 2,000 jobs in Bombardier’s Belfast plant which manufactures the wings for its C-series jets.