Corporate Tax

Eire needs to abolish 12.5% ​​corporate tax

Ireland is reportedly on the verge of abolishing its 12.5% ​​corporation tax in favor of a 15% rate by advocating a new, historic global corporation tax system.

The Organization for Economic Co-operation and Development (OECD) wants to reform international tax rules to ensure that multinational companies pay an appropriate share of tax wherever they operate.

While 130 countries and jurisdictions signed the plan in July, Ireland failed to do so, as the OECD’s draft agreement stipulated that the new corporate tax rate would be “at least 15%”, raising concerns that the rate would rise beyond that later.

Treasury Secretary Paschal Donohoe says Ireland will join a global tax treaty if “security and stability” can be maintained in corporate tax rates and if not “we stay where we are” pic.twitter.com/5IJjKb6yIh

– RTÉ News (@rtenews) September 30, 2021

According to several reports, a newly revised draft of the OECD agreement is said to have deleted the wording “at least” and set the rate at 15%, thus paving the way for Ireland to sign the agreement.

While Treasury Secretary Paschal Donohoe stated on Monday October 4th that work on the deal would continue, sources told The Business Post that Ireland is now increasingly likely to join the deal, although it goes without saying that other important issues are related with the agreement still needed to be drafted.

The cabinet will meet tomorrow, Thursday, to review the OECD’s revised proposals, with the deal expected to be finalized by Friday.

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