Ireland will support the proposal for a global agreement on tax reform for multinational corporations. This means that if this deal goes through, Irish corporate tax will be raised to 15 percent for large companies. The Irish government announced this on Thursday.
Thanks to the low tax rate, Ireland has been able to attract large multinational companies for years that have been looking for a base in Europe, such as Alphabet (Google) and Facebook.
The 15 percent will be applied to companies with an annual turnover of more than 750 million euros. Irish Chancellor of the Exchequer Paschal Donohue said businesses with low turnover would remain at current corporate tax levels of 12.5 per cent.
At Irish request, an amendment was made to a draft version of the agreement. There is now talk of an effective corporate tax rate of 15 percent, no longer “at least 15 percent”. Ireland did not agree to that initial formula. With the Irish “yes”, there is already one less obstacle to a final agreement. Many countries are still looking for exceptions for certain activities, for example.
Ireland’s finance minister estimates that tax reform could cost the country up to €2 billion a year. “The deal strikes a balance between our tax competitiveness and our broader position in the world,” Donohoe said.
On Friday, 140 countries will meet within the Organization for Economic Co-operation and Development (OECD) to discuss the proposal. Estonia’s finance minister announced on Thursday that Estonia will increase corporate taxes to join the agreement.
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