Ireland set to ditch 12.5% corporate tax rate by signing up to new global system 3 months ago

Ireland set to ditch 12.5% corporate tax rate by signing up to new global system

It would be replaced by a rate of 15%.

Ireland is reportedly about to ditch its 12.5% corporate tax rate by signing up for a new, historic global corporate tax system.

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The Organisation for Economic Co-operation and Development (OECD) wants to reform international taxation rules as a means of ensuring that multinational enterprises pay a fair share of tax wherever they operate.

While 130 countries and jurisdictions signed up to the plan in July, Ireland did not as the OECD's draft agreement had said the new corporate tax rate set would be “at least 15%“.

This led to concerns from those within the Irish government that the rate could later increase from 15%.

However, according to multiple reports, a newly revised draft of the OECD agreement is understood to have removed the wording "at least", setting the rate at 15%, thus clearing the path for Ireland to sign up to the agreement.

While Finance Minister Paschal Donohoe stated on Monday (4 October) that work on the deal continues, sources indicated to The Business Post that Ireland is now increasingly likely to join the agreement.

Reuters, meanwhile, quotes French Finance Minister Bruno Le Maire on Tuesday:

"Ireland's position is evolving on this subject and a compromise can emerge at 15%."

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However, it is understood that other major issues regarding the agreement still need to be worked out.

On Thursday, Cabinet will meet to examine the OECD's revised proposals, with the deal set to be finalised by Friday.

Main image via Leah Farrell / RollingNews.ie