Far-reaching global tax reforms are reaching fruition and on the face of it, Ireland has most to lose because of the economy’s strong reliance on US multinationals.
On Thursday, 130 countries endorsed an outline agreement by the Organisation for Economic Co-operation and Development (OECD), which groups 38 wealthy nations, to level up global corporation tax.
“Pillar one” would re-allocate tax jurisdiction from where multinationals are headquartered to where they make profits, while the second pillar would establish a global minimum rate of 15%.
The OECD says the deal will generate an estimated US$150 billion in extra revenues globally, adapt the tax system to the modern digitalised economy and support state finances battered by the coronavirus crisis.
The pact came after the G7 group of wealthy democracies – Canada, France, Germany, Italy, Japan, the US, and UK – last month agreed on the minimum rate of 15% for corporation tax.
Ireland has maintained a 12.5% rate since 2003, and has become the European base for a raft of US companies, especially technology and pharmaceutical…
