By Jonathan McCambridge, PA
The Minister for Finance has welcomed an agreement reached by the OECD to reform international tax rules.
A revised statement and detailed implementation plan have been agreed by 136 jurisdictions, including all the EU Member States and OECD members.
It comes a day after the Cabinet agreed to raise Ireland’s corporate tax rate from 12.5 per cent to 15 per cent.
Paschal Donohoe said that following the agreement, Ireland will continue to be an attractive location for multinational enterprises.
He added: “The agreement reached at the Inclusive Framework demonstrates the importance of working together to achieve positive outcomes for the world.
“This landmark agreement will address global tax challenges of digitalisation and provide the certainty and stability that large business and Government need.”
The far-reaching agreement will introduce two distinct pillars to be implemented.
Pillar one will see a reallocation of a proportion of profits to the jurisdiction of the consumer.
Pillar two will see the adoption of a new global minimum effective tax rate applying to multinationals with global revenues in excess of €750 million.
Mr Donohoe continued: “In July, while I indicated I was broadly supportive of the agreement, I sought additional clarity in relation to key aspects of the agreement, notably ‘at least 15 per cent’.
“Today’s agreement provides that clarity including a set minimum effective tax rate of 15 per cent will apply to our multinational enterprises.
“Ireland’s long-standing corporation tax rate of 12.5 per cent will continue to apply to the vast majority of our businesses who provide the lion’s share of employment in Ireland.”
One of the key elements of the agreement will also see the removal of unilateral digital service taxes over the coming years.
Mr Donohoe said: “I am confident that Ireland will provide an attractive home for multinational enterprises long into the future.
“Ireland will remain ‘best in class’ when multi-nationals look to investment locations, we will continue to have an attractive tax rate, and we will continue (to) have all of the many benefits multinational enterprises in Ireland benefit from and enjoy.”