Ireland have been under the spotlight to embrace the OECD’s global minimum rate of corporation tax. More than 100 countries supported the initial OECD proposals when they were announced in July this year. However, Ireland did not sign up at that time objecting to the wording of the proposed rate increase.
Ireland has fought hard for many years to retain its trading corporation tax rate of 12.5% which has contributed greatly to Ireland’s success. This announcement means that the rate of corporation tax will increase from 12.5% to 15% for super large businesses with a turnover of more than €750m. No rate changes for the SME sector.
Finance Minister Pascal Donohoe has said that backing the deal was “a serious and complex decision” and he added he was absolutely certain that Ireland’s interests were served being part of the deal. The 15% rate will apply to 56 Irish multinationals employing approximately 100,000 people, and 1,500 foreign-owned firms based in Ireland employing approximately 400,000 people.
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