Facebook, Apple, Google and other big tech firms with offices in Ireland are set to take a hit to their bottom line as the country hikes corporate taxes.
Ireland – which is also home to large offices for Twitter and PayPal – is raising its famously low 12.5 percent corporate tax rate to 15 percent, the government said on Thursday.
The country has a long record of using low corporate taxes and generous tax breaks to lure American tech companies and other multinationals. Apple, Microsoft and Intel have all had a presence in the country since the 1980s.
Ireland’s finance department said Ireland’s planned hike – which would put the country in line with a push by the 140-member Organization for Economic Co-operation and Development to close global tax loopholes – would take effect “early 2023”.
The tax increase will apply to companies that take in at least 750,000 euros — or about $868 million — in annual revenue. The government said that approximately 1,500 foreign companies and 56 Irish companies employing a total of 500,000 Irish people meet that criteria.
The US and other countries with high corporate taxes have been pushing for a global minimum tax since at least the Obama administration – but countries such as Ireland and Estonia, another low-tax EU member state, are hesitant to go along with the plan. are. Opponents say that raising taxes will dry up foreign investment.
But Irish Finance Minister Pascal Donohoe spoke with an optimistic tone on Thursday.
“I am confident that Ireland will continue to be competitive in the future, and we will remain an attractive and ‘best in class’ location as multinationals look to investment destinations.” he said.