05 Jul 2022

Ireland set to scrap 12.5% corporate tax

Ireland set to scrap 12.5% corporate tax

Ireland set to scrap 12.5% corporate tax

Ireland is reportedly about to scrap its 12.5% corporate tax in favour of a rate of 15%, by signing up for a new, historic global corporate tax system.

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%“, which led to concerns that the rate would later increase beyond that.

Now, 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, October 4th, that work on the deal continues, sources indicated to The Business Post that Ireland is now increasingly likely to join the agreement, although, it is understood that other major issues regarding the agreement still need to be worked out.

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

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