What you need to know
- Ireland is joining the OECD's International Tax agreement.
- It will mean a minimum rate of 15% for corporation tax for big companies.
- That will impact Apple's operation in the country.
Ireland has this week committed to joining the OECD's International Tax agreement, increasing the amount of tax Apple will pay in the country.
In a press release this week the Irish Government stated:
The Minister for Finance, Paschal Donohoe, has today (Thursday) received Government approval to join an international agreement to reform the international tax rules to address the challenges arising from the digitalisation of the global economy.There are two pillars to this agreement. Pillar 1 will see a reallocation of a proportion of profits to the jurisdiction of the consumer. Pillar 2 will see the adoption of a new global minimum effective tax rate applying to multinationals with global revenues in excess of €750m
The government says it has agreed with the OECD to fix the rate as a precise 15% rather than a proposed minimum effective rate of "at least 15%". The move will affect 56 Irish multinationals including Apple, however, the rules won't come into effect until at least 2023.
In a statement, Minister Donohoe said: "Joining this agreement is an important decision for the next stage of Ireland's industrial policy - a decision that will ensure that Ireland is part of the solution in respect to the future international tax framework. It is a sensible and pragmatic decision made by Government in Ireland's interests and ultimately a decision which will provide the conditions to provide long term certainty for business and investors to the benefit of the many thousands of employees across Ireland."
In 2020 Apple's pre-tax profits in Cork were $33.8 billion, falling by 19% thanks to a bit increase in R&D spending. The company employes 6,000 people in Cork and has operated there for over 40 years.
