Biden’s ‘global minimum’ tax rate could have impact on Ireland

Biden’s ‘global minimum’ tax rate could have impact on Ireland

James Cox

There are fears Ireland's corporation tax rate may be undermined by new proposals by US President Joe Biden.

He has put forward the idea of a minimum rate for American multinationals operating from other countries.

The president wants to raise the corporate tax rate from 21 per cent to 28 per cent, with additional revenue generated from a 21 per cent global tax rate.

It would mean that Ireland's current rate of 12.5 per cent may not be as relevant to foreign direct investment.

It is part of a $2 trillion infrastructure plan announced by the US President last night, which he says will help equality.

“Effectively, if you paid 12.5 per cent in Ireland you might, under this plan, end up paying an extra 8.5 per cent tax on your Irish income in the US,” said Ibec’s chief economist Gerard Brady.

A global minimum tax rate is designed so that multinationals pay a certain amount of tax no matter how they move profits from one country to another.

 

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