The American Chamber of Commerce, which speaks on behalf of US multinationals here employing 100,000 people, warned the Commission on Taxation that Ireland is now facing "potent competition" from the likes of Switzerland, Singapore, Israel and Poland despite having a 12.5% corporation tax rate.


The chamber said while Ireland was guaranteeing a 12.5% rate, the tax burden in each market also involves having "generous deduct­ibles".


The organisation said: "It must be recognised that the effective tax burden on corporate profits is a function of the rate and the base.


"The combination of low taxes and more generous deductibles provide potent competition from many jurisdictions including Switzerland, Singapore, Israel, Poland and other EU states and indeed the United States itself.


It also warned the Commission on Taxation of the potential damage that could be done by the introduction of a carbon tax.


The organisation's submission, seen by the Sunday Tribune, will be released next week by the commission.


It says that any carbon tax "should strike an appropriate balance between what is required to meet our international obligations and the minimisation of cost to industry''.


On the question of deductibles, the organisation said the following areas should be looked at:


* Write-offs on the cost of acquiring intellectual property.


* Write-offs for the cost of acquiring goodwill in business acquisitions


* Tax credits for expenditure on research and development.


The chamber also said it was keen on keeping personal taxes low for non-domiciled employees, particularly in banking.


This would allow Ireland to compete with such locations as the UK and Switzerland.


On the general subject of taxes it said: "Personal tax rates need to reflect the global competitive environment and the increasing mobility of workers."


It also called on the government to give tax deductions to workers who take on vocational and professional training.


The group said Ireland was no longer a low-cost economy and every effort should be made to stop taxes adding to the cost base.