Ireland has agreed to a new 15 percent tax rate for multinational companies, ending 18 years as a low tax regime. “The Government has given approval for Ireland to sign up for the political agreement at the OECD (Organisation for Economic Co-operation and Development) Inclusive Framework on a new tax framework to address the tax challenges of digitalisation,” the Irish Finance Minister Paschal Donohoe said in a press release this week. The agreement will come into effect by 2023, the release stated. The two salient features of this agreement will see Ireland agree to a new global minimum effective tax rate (15 percent) for multinationals with global revenues in excess of €750 million along with a reallocation of a proportion of profits to the country where it is earned, the press release added. A corporate tax rate of 12.5 percent will continue for companies with revenues less than €750 million. The Irish government said that this step was taken in view of the domestic economy and the thousands of SMEs (160,000) that operate in Ireland. Ireland’s decision is significant as the country had been under tremendous pressure from the US and EU to increase the tax rate. The low tax rate managed to attract big companies like Pfizer, Intel, Facebook, LinkedIn, TikTok, Apple, Google, and Twitter. How did the Irish government sign up for the agreement? The 15 percent tax rate will be applicable to 56 Irish multinationals which employ nearly 100,000 people, and 1,500 foreign-owned MNEs based in Ireland that are…
