This Thursday, the 7th of October the Irish cabinet has signed a global tax treaty with the Organisation for Economic Co-operation and Development (OECD), aimed at setting a corporate tax at a rate of minimum 15% in more than 130 countries.
Originally, Ireland was one of a few countries that refused to join the multilateral global tax treaty but the Irish cabinet has finally signed the agreement with OECD which brings an end to the 12,5% corporate tax rate which attracted corporate giants like Facebook, Google or Apple to set its headquarters in Dublin. Now, with Ireland joining its global tax treaty, the OECD has higher chances to finalize the details of a landmark deal between more than 130 countries.
The new arrangements will be limited to companies earning more than 750m EUR globally a year, and will come into force in 2023. It is estimated that the new corporate tax rate would apply to 1556 multinationals based in Ireland, employing about 400,000 people. More than 160,000 businesses making less than 750 million EUR (867 million USD) in annual revenue and employing about 1.8 million people would still be taxed at 12.5%.