The global corporate tax transaction is now within reach. Even the most reluctant Ireland agrees to enter into an agreement with companies to introduce a global minimum rate of 15% to discourage the habit of multinational corporations turning to profits where they pay lower taxes. A few hours later, Estonia joins. Among the EU countries, only Hungary now continues to defend itself, which does not prevent the EU from being unanimous on tax matters.
Ireland joins OECD International Tax Agreement. “This is a momentous and extremely positive step for Europe’s collective efforts to build a more just and sustainable global tax system,” Polo Gentiloni, the European Economy Commissioner, wrote on Twitter.
The bad news for web giants like Apple, Google, Amazon and Facebook is that Ireland has been chosen as a place to take advantage of tax treatment that is more favorable to European operations. Only 12.5% of their profits. Dublin also loses: The new global tax, which is due to take effect in 2023, will cost up to $ 2 billion in lost revenue.
On the eve of the OECD meeting, Finance Minister Paschal Donohue announced the lowest rate of 15%, following recent advances in progress towards an agreement by Irish Prime Minister Michelle Martin. Friday in Paris. “The government has now accepted Ireland’s recommendation to join the international consensus. It is the right decision, it is a prudent and practical decision,” Donho said at a press conference, announcing Dublin’s withdrawal of opposition to the global corporate tax review, and its 12.5 rate for large multinationals. Donoho said he was confident that Ireland would remain an attractive investment destination for multinational corporations.
Now 141 countries in the world are ready for the historic signing, which will put an end to tax competition. Once the deal is made on the card, the details will have to wait until the beginning of next year.
Ireland, which has the lowest tax rate in developed countries at 12.5%, however, examined the possibility of keeping a 12.5% tax rate on domestic companies at a turnover of 750 million.
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