After initial staunch opposition, Ireland has agreed to join the OECD global corporate tax deal, which was struck in July of this year. The deal has been signed by over 140 countries and aims to set a global effective minimum corporate tax rate of 15%. Minister for Finance, Paschal Donohoe, indicated Ireland’s willingness to sign up, as long as certain conditions were met. These related to technical and antitrust concerns surrounding the deal and needed to get the backing of the Irish government. As these conditions were met, Ireland got on board on Thursday evening after a Cabinet meeting.
Revised proposals for the deal were sent to Donohoe on Thursday afternoon ahead of the meeting where he presented the updates and made his recommendation. It is expected the deal will be made final after an OECD meeting this afternoon, Friday.
Ireland, which is the headquarters for a number of the world’s largest multinationals, had opposed the introduction of a proposed minimum global rate of “at least” 15%, and in particular the phrase “at least” that it says would undermine the certainty its prized 12.5% rate had given companies for years. This relatively low 12.5% tax rate has been a cornerstone in Ireland’s successful foreign direct investment offering for decades and has been fiercely defended by successive governments.
The minimum corporate rate of 15% will only apply to companies that have an annual revenue of at least €750 million. It will affect 56 Irish firms employing around 100,000 people and 1500 foreign-owned multinationals with around 400,000 staff.
Taoiseach Michael Martin told Irish media that the change “represents very significant progress in terms of the evolution of this deal within the OECD”. “Our challenge is to maintain certainty around tax for investors and for companies that are located here – continuity,” he said.