Any increase in corporation tax in Ireland could seriously impact the country's vital technology industry.
So said the American Chamber of Commerce Ireland (AmCham Ireland), which has voiced concerns about any rise in the 12.5 per cent company profit tax.
Ireland is in serious economic turmoil and has managed to get itself a bailout over the weekend, which includes a significant loan from the UK.
In return for this European assistance, some members of the EU have called for a rise in corporation tax to help deal with the dangers of economic collapse in the short term.
However, a number of US firms have claimed the future of the technology industry in Ireland could be bleak if any such move were made.
"Ireland's competitive tax regime and favourable corporation tax rate remains one of our greatest attractions for new and existing investment," an AmCham Ireland spokesperson told IT PRO.
"If Ireland isn't a compelling location for companies to conduct their business here, they will locate elsewhere and the benefits that accrue in terms of employment, the contribution to Ireland's tax take and the development of innovation will be lost."
AmCham Ireland issued a statement last week, with support from members at Intel and Microsoft, backing a Government commitment to maintain the corporation tax level.
Technology plays a major role in Ireland's economy, with 200 companies working in the country, including seven of the world's top 10, employing 83,000 people nationwide.
"Companies making international investment decisions look for a set of competitive conditions and certainty that these can be maintained over the lifespan of any particular investment," the spokesperson added.
"As long as Ireland continues to offer this, companies will continue to locate here, which is why we have seen a number of technology firms increase their investment in Ireland during 2010."
Google recently spoke to the Belfast Telegraph about how a rise in the tax would be detrimental not just to the company, but to the country as a whole as well.
"Anything that impinges on Ireland's competitiveness is going to be a big thing for Google, including corporation tax," said Google Ireland boss John Herlihy.
"And anything that increases the cost-base of a business is negative for competitiveness."
