Ireland has for decades defended its low corporate tax rates against all comers, rejecting proposals from across the EU and the US that it wasn’t fair to lure large corporations into settling here at a fixed rate of 12.5 percent.
Everything changed at the end of last week. A global deal to ensure large companies pay a minimum tax rate of 15 percent has been finalized, with Ireland signing the details last Thursday.
The move is intended to make it more difficult for multinationals to avoid taxation in one country by channeling their income through another country. It was signed by 136 nations, all working under the auspices of the Organization for Economic Co-operation and Development (OECD).
But what does the deal actually mean for Ireland? Will higher taxes mean that big corporations will earn more money? Or will the elimination of a tax advantage that Ireland has been diligently undermining since the 1990s – and even earlier – will result in businesses leaving or not settling here in the future?
In response to the OECD announcement, Treasury Secretary Paschal Donohoe said the deal “provides the security Ireland needs” and expressed confidence that Ireland will be able to try to attract new businesses to Ireland in the future claim.
Irish Times editor-in-chief and columnist Cliff Taylor spoke to Conor Pope about what the new deal means for Ireland.
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