In early October 2021, the Government of Ireland announced its readiness to join an international agreement that provides for an increase in income tax for large multinational corporations. The rate for them will change from the current 12.5% to 15% in the framework of the initiative of the Organization for Economic Cooperation and Development (OECD).
The OECD Agreement should make international tax rules fairer and more transparent. The OECD estimates that a 15% tax in member countries will bring in about $ 150 billion annually and help stabilize the international tax system.
According to the OECD plan, companies must pay taxes in the countries where their products or services are sold, even if they do not have a presence there. The requirements will apply to international companies with revenues of more than € 750 million (about $ 867 million). If it is lower, the tax in Ireland will be 12.5%.
Hungary continues to oppose the OECD agreement. If all stakeholders succeed in reaching a consensus, the agreement will enter into force in 2023.
According to the American Chamber of Commerce Ireland, 800 companies operate in Ireland. The American corporation Apple launched its factory there in 1980; today the company employs about 6 thousand people in Cork. Facebook and Google opened their international and European headquarters in Dublin in 2008 and 2003, respectively.
The increase in the corporate income tax rate, according to the Ministry of Finance of Ireland, will affect 56 local international companies with a total number of employees of about 100 thousand people. In addition, the additional tax burden will fall on the shoulders of 1.5 thousand foreign multinational corporations that have opened their offices in Ireland. These companies provide approximately 400,000 jobs.
