The Minister for Finance Paschal Donohoe has said he remains confident the State’s low-tax economy would continue to attract multinational investment and jobs even as an overhaul of global corporation tax rules moved a major step closer on Saturday.
The United States, UK and other G7 nations agreed to back a minimum global rate of at least 15 per cent and for firms to pay more tax in the markets where they sell goods and services rather than in countries like the Republic of Ireland where they book profits.
Having more to lose than most from the reforms due to the attractiveness of its 12.5 per cent rate to foreign multinationals, Irish officials continued to press the case that any final deal must meet the needs of small and large countries.
Mr Donohoe, who attended Saturday’s meeting in his role as president of euro zone’s grouping of finance ministers, also pointed to the fact that companies like Apple have been in the State for decades and are among its largest employers.
“The tax environment that is developing at the moment is one also that multinationals are evaluating. The reason that I’m very positive about our country’s future and our economy is twofold,” Mr Donohoe told The Irish Times.
He cited the fact multinationals are “well embedded in terms of the physical infrastructure of our country” due to the longevity of their investments and the fact Ireland has been clear about how it will respond to change and remain a predictable destination for foreign companies.
Big multinationals such as Apple, Facebook and Google directly employ around one in eight workers in the State and account for over 80 per cent of corporation tax receipts which have boomed in recent years.
Mr Donohoe reiterated Ireland’s annual corporate tax take is set to be around 20 per cent or €2 billion lower than it otherwise would have been by 2025, due to the anticipated changes.
However, the Department of Finance has forecast it will still increase gradually by then to €12.5 billion from an estimated €11.6 billion this year.