Business tax reform will put an end to Ireland

Business tax reform will put an end to Ireland

(The author is a columnist for Reuters Breakingview. The views expressed are hers.)

LONDON – Ireland could ultimately benefit from a change in global corporate tax laws. Dublin will spend billions of euros on their coffers. More likely to make such a change, the impetus for revitalizing Emerald Island’s crumbling infrastructure will remain competitive. This will help solve the hitherto hidden financial problems through healthy tax transportation.

U.S. Treasury Secretary Janet Yellen proposed at least 21% corporation tax and received support from Germany and France. Dublin estimates it will cut $ 2 billion a year in cash flow. While resistance fighters cannot be forced to accept this minimum, companies that pay lower taxes in a particular country may have to pay a difference from their domestic government. This would remove the incentive for companies like Apple and Google, which own Alphabet, to seek the lowest tax jurisdiction.

There was a good run in Dublin. Prior to 1996, annual corporate tax revenue was less than 2 2 billion, when the tax rate was reduced from 40 percent to 12.5 percent. In 2020, it was about 12 billion euros. Multinational companies employ one in eight people in Ireland. The resistance of these companies during the Pandemic led to a 3.4% growth in Irish GDP by 2020.

Now Ireland is at risk of not engaging in tax competition and is looking for other ways to take advantage of it and attract foreign businesses. Prime Minister Michael Martin plans to spend 4% of the country’s GDP on infrastructure and 11. 11.6 billion on housing. The company also plans to buy 600 electric cars for the upgraded rail network. With the project completed in 2027, Ireland will overtake its European rivals, who have historically spent 3% of GDP on infrastructure.

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Such an investment is obsolete. Public transportation is being created, and chronic housing shortages have forced companies like PayPal to ask their employees to provide rooms in lieu of new employees. The additional cost, without attracting new businesses, creates a strong foundation for the economy.

News from the content

– The finance ministers of France and Germany support the US government’s idea of ​​achieving a corporate tax rate of at least 21%, she said in a joint interview with Seat Online on April 27.

– On April 27 your Austrian counter welcomed the proposal of US Treasury Secretary Janet Yellen to work with the G20 countries to agree on a minimum rate this month.

– The Organization for Economic Co-operation and Development has been coordinating negotiations between 140 countries for years and reaching a consensus by mid-2021. OECD tax chief Pascal Saint-Amans told an Irish government online conference on April 21 that an agreement should be reached this year.

– The 12.5% ​​corporate tax rate has attracted large multinationals such as Facebook, Google and Apple, making Ireland one of the biggest losers in such transactions.

(The author is a columnist for Reuters Breakingview. The views expressed are hers.)

(Subscribe Email BREAKINGVIEWS | Edited by Swaha Pattanai and Karen Kwok) (([email protected]; Reuters messaging: [email protected]))

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