Ireland says yes to global corporate tax

Ireland says yes to global corporate tax

Ireland and Estonia will join the Global Agreement on a Corporate Tax of 15% for Multinationals from 2023: 134 out of 140 countries have already signed the OECD agreement, which is crucial (and symbolic for Dublin). On the eve of the new OECD ministerial meeting in Paris, the Irish yes was confirmed by Finance Minister Pascal Donohue following his departure from the Dublin government.

Farewell to the cornerstone of Irish monetary policy

“This is a balance between our competitiveness and our position in the world,” Donoho said. Announced, while waiving the 12.5% ​​corporate tax that was the cornerstone of its monetary policy. For more than twenty years, it has been strongly resisted by pressure from its European Union partners, France.

Favorable taxes (not only corporate taxes, but also guarantees subsidized targets or agreements that allow multinational corporations to pay meager taxes) were key factors in bringing the European headquarters of giants such as Google, Apple and Facebook to Dublin.

SMEs are excluded

The new rate will affect more than 1,500 companies that employ about 400,000 people in Ireland and, according to preliminary estimates, steal $ 2 billion a year from the state treasury. On the other hand, Irish small and medium enterprises with an annual turnover of less than 50 750 million will continue to contribute 12.5% ​​of profits. The assurance given in this sense was one of the two factors that convinced Ireland to abandon the difficulties that led to the non-signing of the agreement in June.

However, even more important was the second factor: a review of the text of the agreement, which, in the new version, does not refer to the tax as “at least 15%” but “15%”, giving some hints. For those who want to invest and purify the Irish, when the EU passes the necessary proposal to implement the new regime, some countries will not present as high rates as they would like. “The European Commission – added Donoho – has assured me that the proposal will be faithful to the agreement and will not go beyond international consensus.”

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