Thursday, October 07, 2021

The minimum tax agreement is being reconsidered
Ireland raises taxes for Apple and company

134 countries have signed an agreement on the lowest tax rates for large corporations. However, in Europe, Ireland is excluded everywhere, which attracts many companies with low taxes. But now the country is giving in. 1500 international corporations face high tax bills.

Ireland now wants to join the OECD agreement at 15 per cent of the global minimum tax rate for large corporations. After the cabinet meeting, Finance Minister Paschal Donoho said control was the “right” way, “balanced” decision and “reasonable compromise”. Estonia also announced the signing of the agreement.

In July, G20 finance ministers agreed to impose a global minimum tax on large corporations with an annual turnover of at least 750 million euros. In the future, they will have to pay at least 15 percent corporate tax everywhere.

Since then, 134 countries have signed the OECD-led agreement. However, Ireland has long rejected this. In the past, the country has attracted many large international corporations with a corporate tax rate of 12.5 per cent, which is very low by international standards. For example, Google, Apple and Facebook have their European headquarters in Ireland, and Airbnb and Amazon are represented in larger locations.

1500 foreign companies were affected

According to Donohue, 56 Irish companies with about 100,000 employees, 1,500 foreign companies with offices in Ireland and about 400,000 employees in the country will be affected by higher tax rates in the future. The Finance Minister expects the new tax rate to come into effect in 2023. He was convinced that Ireland would remain “internationally competitive”.

Shortly afterwards, Estonia also announced its intention to sign the agreement. “We are entering into a global tax agreement,” said Prime Minister Kaja Kallas. Nothing will change for most Estonian companies, she promised. Hungary is the last member of the OECD not to sign.