Ireland Signs On To Global Deal Seeking To Curb Tax Avoidance
Ireland, a low-tax country that is the European headquarters to some of the largest U.S. technology companies, said it would join a global agreement to set a minimum rate of 15% for taxing corporate profits, easing the way to a final agreement on an overhaul of how multinationals are taxed around the world. From a report: Ireland had been one of a small number of holdouts when the outlines of a global agreement were settled in July. That accord, driven by the U.S., aims to overhaul the way multinationals are taxed, the culmination of a yearslong effort to squeeze tax avoidance arrangements. While small, Ireland plays an outsize role in strategies used by companies from the U.S. and elsewhere to lower their global tax bills. Most of the largest U.S. technology firms have their European headquarters in Ireland, and the country has also attracted the largest U.S. pharmaceutical companies. Ireland's decision to raise its corporate tax rate from 12.5% after the agreement is implemented is a concession to key allies, particularly the U.S. "I do believe that where we are now is balanced and represents a fair compromise, reflecting the interests of the many countries involved," said Paschal Donohoe, Ireland's finance minister. Companies that rely on intellectual property can concentrate their profits in Ireland rather than in the higher-tax countries where their consumers live, and that has been a source of frustration for other governments.
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