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Business & Finance

Ireland sees 2-4 year implementation of any OECD corporate tax deal

  • After the new US administration threw its weight behind a push for a global corporate minimum tax rate last week, Dublin said that how quickly an agreement will be implemented depends on where it comes from and the nature of it.
  • "If that agreement is led by (US) President Biden, that change could be legislated for by this year and they are working to get an agreement on such a package," Irish Finance Minister Paschal Donohoe told a news conference.
Published April 14, 2021

DUBLIN: Ireland expects that if a deal on global corporate tax changes is reached at Organisation for Economic Cooperation and Development (OECD) talks this year, it will be put into effect over a two- to four-year period, its finance minister said.

The OECD has been coordinating tax negotiations among 140 countries for years and aims to reach a consensus on how to discourage multinational companies from shifting profits, and tax revenues, to low-tax jurisdictions like Ireland by mid-year.

After the new US administration threw its weight behind a push for a global corporate minimum tax rate last week, Dublin said that how quickly an agreement will be implemented depends on where it comes from and the nature of it.

"If that agreement is led by (US) President Biden, that change could be legislated for by this year and they are working to get an agreement on such a package," Irish Finance Minister Paschal Donohoe told a news conference.

"If that is led by the OECD, my expectation is that we will see an OECD agreement of some form as we move through this year and the window of implementation in terms of how long it would take to implement it and then over what time period the changes would be apparent in our levels of economic activity, I would see that as being across a two- to four-year window."

Donohoe's department forecast on Wednesday that Ireland's annual corporate tax take would be 2 billion euros lower than it otherwise would have been by 2025, due to the anticipated changes, but would still increase gradually by then to 12.5 billion euros from an estimated 11.6 billion this year.

However it added that corporate tax reform could weigh more heavily on revenues than is currently assumed and, "leaving aside the fiscal implications, could undermine Ireland's attractiveness as a location for inward investment".

Multinational companies such as Facebook, Google and Apple are major employers in Ireland, with the sector directly accounting for around one in eight jobs in the economy.

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