Connect with us

Hi, what are you looking for?

Investing

Ireland will resist global corporate tax rate finance minister announces

Ireland offices

Ireland’s finance minister has signalled the country will resist attempts to rebalance the global tax system if they affect Dublin’s ability to undercut its rivals.

Under new tax proposals led by the US, Ireland could lose 20% of its tax revenues, according to Paschal Donohoe.

He said he would support a global agreement that allowed “appropriate and acceptable tax competition” between states, as momentum grows for an agreement to prevent Ireland and others from attracting others with dramatically lower effective tax rates.

The global tax system has failed to adapt to the rise of digital services across borders in recent decades, and critics argue that the lack of harmonised rules has triggered a “race to the bottom” on global tax.

Attempts to fix the system and prevent multinational companies from choosing an advantageous tax jurisdiction were previously stymied by the US, home of tech companies such as Apple, Google’s owner Alphabet and Microsoft, which were among the beneficiaries.

Under Joe Biden, however, the White House has made proposals to break the deadlock, including a global minimum corporate tax rate of 21% of profits and allowing countries to charge some tax based on the location of sales.

The changes could prove dramatic for Ireland, a relatively small economy which has taken an increasing role in the global tax system because of its political stability and rules that allow big companies to pay far lower corporation tax rates than in many other big economies.

Speaking at a virtual summit convened in Dublin, Donohoe said the country would seek to retain its current tax rate. Its headline corporate tax rate is 12.5%. The UK’s is 19% and is due to rise to 25% from April 2023. Many large companies end up paying a fraction of the 12.5% rate.

Apple paid an effective rate of less than 1% for many years in Ireland, falling as low as 0.005% in 2014, on revenues that were mainly derived from sales in other countries.

The European commission ruled in 2016 that Apple had to repay €13bn (£11.2bn) in back-taxes to Ireland after deciding that a secret tax deal represented illegal state aid. That decision, however, was struck down by an EU court in July. The commission is appealing against it.

Donohoe said small countries should be allowed to use lower taxes to “compensate for advantages of scale” enjoyed by larger economies. Other small territories such as the UK’s offshore crown dependencies and overseas territories also use low or zero corporation tax rates to attract business.

Read more:
Ireland will resist global corporate tax rate finance minister announces

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Investing

Virgin Orbit’s next satellite launch will take place from the UK, following the success of the “Straight Up” mission, which lifted off from Mojave...

Investing

Post Office collection and cash delivery workers are to stage a one-day strike later this month in a dispute over pay. Members of the...

Investing

UK consumers cut back on credit card borrowing in May amid fears over rising interest rates and a slowing economy driven by a cost...

Investing

London City airport is seeking to overturn its Saturday flight ban and raise by 40% the limit on its passenger numbers. A local residents’...

Investing

The bank said that it was introducing a £1,200-a-year pay increase from August 1, which would start to show in next month’s pay packets....

Investing

Postmasters caught up in the Horizon IT scandal say that they are still being “left in the dark” about a compensation package after the...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.