Ireland agrees to raise corporation tax to 15%

The Irish government will support a deal to set a global minimum corporation tax rate for large firms.

The country will consequently increase its 12.5% rate to 15% for firms with turnovers exceeding €750m (£636m).

The Organisation for Economic Cooperation and Development (OECD) has spearheaded efforts to agree on a global minimum rate.

Ireland’s Finance Minister Pascal Donohoe has said it was “a serious and complex decision,” but that he was certain it would help Ireland’s interests.

100 plus countries supported the initial proposals announced by the OECD in July.

However, Ireland initially rejected the proposals as they said the rate should be set at “at least 15%”, whereas the final plans fix it at 15%.

While Ireland has used its low tax rate as a central part of efforts to attract foreign investment, a global minimum rate will weaken corporations’ abilities to move their profits to benefit from lower tax rates.