DUBLIN (Businesshala) – Ireland has received assurances that it will raise its 12.5% rate for firms with annual turnover less than 750 million euros ($867 million) if it agrees to a new global minimum corporate tax rate of 15%. could be sustained, Deputy Prime Minister Leo Varadkar said.
Irish ministers are due to meet on Thursday to decide whether to sign up for the Organization for Economic Co-operation and Development-brokers (OECD) on how multinationals are taxed.
As it stands, the deal will mean that Dublin can no longer offer its prized 12.5% rate to blue chip companies including Google and Facebook, whose European headquarters are based in Ireland.
Ireland refused to sign an initial global agreement in July, which a handful of the 140 countries involved agreed to.
The government has sought to negotiate with the OECD and the European Commission to retain the ability to charge small and medium-sized companies the lower 12.5% rate.
“The minister (finance) told me today that we have got that assurance and we can do that,” Varadkar told parliament on Thursday.
An updated draft text this week dropped “at least” reference to a proposed minimum global corporate tax rate of 15%, removing a major hurdle for Ireland, saying the warning would undermine the certainty that Its tax code has offered multinationals for years.
Ministers have said they are confident the cabinet will agree to the deal.
Approval from Ireland, one of the countries most likely to benefit from lower corporate taxes, would be a major boost for the project to implement a minimum global rate.
A handful of holdouts, which also include fellow EU members Estonia and Hungary, however, cannot stop the proposed changes.
($1 = 0.8649 Euro)