As a result of US proposals to introduce a minimum corporate tax rate of 21%, countries like Ireland are presumed to lose significant revenue. Under the Stability Programme Update for 2021 of the Irish Department of Finance published on 14 April, Ireland stands to lose 2 billion Euros in corporate tax revenue by 2025.
Commenting on these developments, Pascal Donohoe, Ireland’s Finance Minister said: “Small countries, such as Ireland, need to be able to use tax policy as a legitimate lever to compensate for advantages of scale, resources and location enjoyed by larger countries.”
Technical details of the OECD proposals, including the rate on minimum tax, are currently under negotiations, but are widely expected to be settled in the range around 15%, rather than 21% as suggested by the United States. The negotiations at the OECD/ G20 level are expected to be completed by mid-year.
Ref. CFE’s Tax Top 5 – 19 April 2021