section_path: Economy/Taxation policy
section_name: Taxation policy
paragraph_text: Taxation policy
  
  The transformation of Ireland's tax policy started with the creation of a 10% low-tax " special economic zone ", called the International Financial Services Centre (or "IFSC"), in 1987. In 1999, the entire country was effectively "turned into an IFSC" with the reduction of Irish corporation tax from 32% to 12.5%. This accelerated the later stages of Ireland's transition from a predominantly agricultural economy into a knowledge and service economy initially focused on property and construction and later focused on attracting mainly US multinationals from high-tech, life sciences, and financial services industries seeking to avail of Ireland's low corporation tax rates and favourable corporate tax system.
  
  The multinational tax schemes foreign firms use in Ireland materially distort Irish economic statistics. This reached a climax with the " leprechaun economics " GDP/GNP growth rates of 2015 (as Apple restructured its Irish subsidiaries in 2015). The Central Bank of Ireland introduced a new statistic, Modified gross national income, to remove these distortions. GNI* is 30% below GDP (or, GDP is 143% of GNI).
  
  From the creation of the IFSC, the country experienced strong and sustained economic growth which fuelled a dramatic rise in Irish consumer borrowing and spending, and Irish construction and investment, which became known as the Celtic Tiger period. By 2007, Ireland had the highest private sector debt in the OECD with a household debt-to-disposable income ratio of 190%. Global capital markets, who had financed Ireland's build-up of debt in the Celtic Tiger period by enabling Irish banks to borrow in excess of the domestic deposit base (to over 180% at peak), withdrew support in the 2008 financial crisis. Their withdrawal from the over-borrowed Irish credit system would precipitate a deep Irish property correction which then led to the Post-2008 Irish banking crisis.
  
  Ireland's successful "low-tax" economy opens it to accusations of being a "corporate tax haven ", and led to it being "blacklisted" by Brazil. A 2017 study ranks Ireland as the 5th largest global Conduit OFC, which legally route funds to tax havens. A serious challenge is the passing of the US Tax Cuts and Jobs Act of 2017 (whose FDII and GILTI regimes target Ireland's multinational tax schemes). The EU's 2018 Digital Sales Tax (DST) (and desire for a CCCTB) is also seen as an attempt to restrict Irish " multinational tax schemes " by US technology firms.