Ireland is set to hike its corporate tax rate from 12.5 per cent to 15 per cent, as the country signs up to a global tax reform for minimum rate internationals.
Its low tax rate had previously drawn in tech giants like Apple and Facebook, who both centre their European operations there.
The reform, finalised today, will apply to multinational firms which rake in more than €750m a year – therefore, small and medium enterprises (SMEs) will not have to abide by the new rates.
“The government has now approved my recommendation that Ireland joins the international consensus,” Irish finance minister Paschal Donohoe said on Thursday. “This is the right decision, it is a sensible and pragmatic decision.”
The finance minister added that the decision came after “detailed discussion”, with the country’s post-pandemic recovery likely in mind.
He also said that Ireland’s interests would be better served within the agreement and that they had reached a “balanced” and “fair compromise.”