What Ireland’s new corporate tax rate means for you

Podcast: Global deal to make it harder for multinational companies to avoid taxation

Paschal Donohoe: says deal provides certainty for Ireland. Photograph: Patrick Bolger/Bloomberg

Paschal Donohoe: says deal provides certainty for Ireland. Photograph: Patrick Bolger/Bloomberg

 

For decades Ireland has defended its low rates of corporate tax against all comers and rejected suggestions from across the EU and the US that it wasn’t playing fair by enticing big companies to set up here with a rate that stood fixed at 12.5 per cent.

Late last week everything changed. A global deal to ensure big companies pay a minimum tax rate of 15 per cent was done, with Ireland signing off on the details last Thursday.

The move is to make it harder for multinational companies to avoid taxation in one country by funnelling their revenues through another. It has been signed off on by 136 nations, all operating under the auspices of the Organisation for Economic Co-operation and Development (OECD).

But what will the deal actually mean for Ireland? Will higher taxes mean Revenue gets more money from big businesses? Or will the removal of a tax advantage leveraged assiduously by Ireland since the 1990s – and even earlier – mean companies will leave Ireland or never bother setting up here in the future?

Reacting to the OECD announcement, Minister for Finance Paschal Donohoe said the deal “provides the certainty necessary for Ireland” and he expressed confidence that Ireland would be able to hold its own when trying to attract new businesses into Ireland in the future.

Irish Times managing editor and columnist Cliff Taylor spoke to Conor Pope about what the new deal means for Ireland.

You can listen to the podcast here:

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