Corporation tax rate for larger firms here expected to rise to 15% in 2024, Donohoe says
The Minister for Finance has said he expects Ireland’s corporation tax rate will be increased to 15% in 2024 for large companies that are subject to last year’s global tax deal.
It follows a deal brokered at EU level earlier this week, which saw Hungary drop its opposition to a minimum corporation tax rate of 15% for the bloc.
The OECD negotiated a global deal on tax reform last year, which included the introduction of a minimum rate of 15%.
However, political wrangling at EU level over recent months has held up its implementation.
Paschal Donohoe said he believes on balance that the development is a positive one for small open economies and that he would anticipate that the necessary changes would be included in the Finance Bill next year.
“We will implement such a change with a view to it taking effect in 2024,” Mr Donohoe said to reporters following the launch of the latest OECD report on Ireland at the Institute for International and European Affairs.
“This will mean a change in corporate tax revenue, but this is the reason why we’re running a surplus of €12 billion in November of this year.”
“And it’s the reason now why we’re putting money into a National Reserve Fund that will be equivalent to around €6 billion by early next year.”
The increase will apply to companies that are deemed within the scope of Pillar 2 of the OECD agreement.
These include firms with a group turnover of over €750 million per annum only. All other companies will continue to pay a 12.5% rate of corporation tax.
Mr Donohoe said EU countries will implement the directive requiring the tax change throughout 2024.
“Different parliaments and different governments have different times of the year in which changes are brought in,” he said.
“But my expectation is across the calendar year of 2024 you would see most if not all countries move to that level. Of course, for some countries they have corporate tax rates that are already above 15%.”
“So the level of change they would need to make would be a lot smaller and it would more be around the role of allowances and the definition of allowances within their tax code.”