Ireland initially opposed, but still agreed to a worldwide minimum 15% profit tax rate plan. The government will announce it tonight. This represents a new step in an international initiative to combat tax evasion by large groups.
Paschal Donohue said, “At this point, entering into this agreement is the right message and the right move for Ireland. So the government is taking into account the international financial development, and implementing it within the European Union, especially in the United States.” Irish Treasury Minister.
The country’s tax rate is currently 12.5 percent, which attracts big tech companies. For example, both Google and Facebook are based in Ireland and do not pay any tax in the other countries in which they are active.
Pay wherever you are active
The “deal of the century” only became a topic of discussion when US President Biden proposed higher taxes on large multinational corporations. The Organization for Economic Development and Cooperation (OECD) and the European Commission have been working for years on a global reform to combat tax evasion.
The idea is that large multinational corporations will pay taxes in every country in which they operate. The minimum profit tax of 15 per cent will only be applied to companies with a worldwide turnover of at least 20 billion euros and a profit margin of 10 per cent.
Countries will also soon be allowed to “charge additional fees” if a multinational company in another country stays below the minimum rate. Now you can’t.
Dozens of countries have not yet joined the plan. Hungary, Barbados, Kenya, Nigeria, Peru, Sri Lanka, Saint Vincent and the Grenadines stuck. A meeting on the proposal will take place tomorrow, led by the Organization for Economic Co-operation and Development, and more countries may say yes after all.
