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Ireland has long been a magnet for multinational companies.
With its 12.5% corporate tax rate, English-speaking workforce, and EU membership, it became home to the European headquarters of major tech giants like Apple, Google, and Meta.
But global tax reform – particularly the OECD’s minimum tax initiative – is changing the rules of the game.
What does this mean for Ireland’s economy and its future as a hub for international business?
For over two decades, Ireland’s 12.5% corporation tax rate has been a key pillar of its economic policy.
It attracted foreign direct investment (FDI), created tens of thousands of jobs, and turned Dublin into a global business centre.
But critics argued that it also allowed companies to shift profits into Ireland, reducing their global tax bills and depriving other countries of revenue.
In 2021, over 130 countries – including Ireland – agreed to implement a global minimum corporate tax rate of 15% on large multinational companies (those with global revenues over €750 million).
This is known as Pillar Two of the OECD’s global tax agreement.
Ireland initially resisted the change, concerned it would reduce its competitive edge. But after securing a carve-out that allows the rate to remain at 12.5% for smaller companies, Ireland signed up.
From 2024, Ireland will apply the 15% minimum tax to large multinationals operating there.
This means that even if a company benefits from local incentives or deductions that lower its effective tax rate, a “top-up” tax will apply if the global rate falls below 15%.
This change is highly significant for Ireland. While the government expects the country to remain attractive – due to its talent, EU access, and stable legal system – some economists warn that the golden era of FDI-driven growth may cool slightly.
In response, the Irish government is focusing more on long-term, sustainable growth through infrastructure, education, and innovation, rather than relying purely on tax competitiveness.
For large companies already in Ireland, the tax bill is likely to rise slightly, especially if they were benefiting from preferential structures.
But for small and medium-sized businesses — including many Irish companies — the 12.5% rate continues to apply.
That means Ireland still offers one of the most attractive environments for smaller international businesses looking for an EU base.
Ireland’s place in the global tax landscape is evolving. It remains a strong destination for business, but the days of ultra-low tax planning through Ireland are being replaced by a more level playing field. As the OECD’s global tax framework beds in, Ireland’s future success will depend on more than just its tax rate — and that’s not necessarily a bad thing.
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Just when the world thought it was on the cusp of a global tax breakthrough, cracks are beginning to show.
The landmark OECD agreement aimed at overhauling how multinational companies are taxed is facing renewed opposition – and much of the resistance is coming from the United States.
This could have major implications for how, when, and even if the deal is implemented.
The OECD’s two-pillar framework was designed to tackle tax avoidance and ensure large multinationals pay a fairer share of tax, wherever they operate.
Pillar One reallocates taxing rights so market countries can tax a portion of profits.
Pillar Two introduces a global minimum corporate tax rate of 15% for companies with annual revenues above €750 million.
Over 135 countries, including the US, have committed in principle. But turning that agreement into domestic law is proving to be the real challenge.
Although the Biden administration supported the OECD framework, political realities have changed.
With a divided Congress and strong Republican opposition, passing necessary legislation has become difficult.
Critics in the US argue that the global minimum tax could hurt American competitiveness by effectively outsourcing tax sovereignty.
There’s also concern that other countries are implementing Pillar Two but dragging their feet on Pillar One – potentially putting US firms at a disadvantage.
US hesitancy could derail the entire project.
Other countries, particularly in the EU and Asia, are moving forward with minimum tax rules.
If the US doesn’t follow suit, it undermines the whole concept of a level playing field.
There’s also a risk that disputes over digital taxes, which Pillar One was supposed to resolve, could flare up again if countries lose patience with the OECD timetable.
All eyes are now on the US Congress and upcoming elections.
Without US implementation, the deal lacks weight — and countries may return to unilateral measures like digital services taxes.
This would be a setback for international cooperation and tax certainty.
The global tax deal was a diplomatic achievement, but its future is far from guaranteed.
If the US backs away or delays indefinitely, other countries may rethink their own commitments — and the dream of a fairer global tax system could stall once more.
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The UK government is exploring ways to reduce the burden of its digital services tax (DST) on American tech giants as part of broader trade discussions with the United States.
The move comes amid rising international pressure and a growing consensus that digital taxation should be handled multilaterally through the OECD framework.
The UK’s DST, introduced in 2020, imposes a 2% levy on the revenues of large digital businesses that earn money from UK users.
This includes revenues from search engines, social media platforms, and online marketplaces.
The tax applies to companies with global revenues over £500 million and at least £25 million of UK-derived revenue.
Recent reports suggest the UK is considering adjustments or possible early withdrawal of the DST to avoid escalating tensions with the US, which has long criticised the tax as unfairly targeting American firms.
The US has threatened retaliatory tariffs against UK exports if the DST remains in place beyond the implementation of the OECD’s global tax framework.
As trade talks progress, the UK may offer concessions to secure a broader deal.
Under the OECD’s two-pillar agreement, countries that have introduced unilateral digital taxes are expected to remove them once Pillar One (which reallocates taxing rights over digital profits) is implemented.
The UK has committed to this, but with the global deal’s timeline uncertain, there’s growing pressure to act sooner.
Domestically, opinions are split.
Some MPs and economists argue that the DST is necessary to ensure tech giants pay their ‘fair share’, especially during times of economic strain.
Others argue that it’s a temporary fix and should be removed in favour of multilateral rules that apply consistently across jurisdictions.
Any softening of the DST is likely to be politically controversial.
However, it may help the UK achieve its long-term goal of securing a comprehensive trade agreement with the US – and could also pre-empt future disputes if Pillar One implementation drags.
The UK’s digital services tax has always been a stopgap measure.
With global reforms on the horizon and trade talks with the US intensifying, its days may be numbered – either replaced by multilateral rules or scrapped to preserve trade harmony.
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Australia has implemented one of the world’s most stringent tax disclosure laws, seemingly raising the bar for corporate transparency.
From January 2025, multinational corporations (MNCs) operating in Australia are required to disclose detailed financial information, including revenues, profits, and taxes paid across 41 jurisdictions, many of which are recognized as low-tax or tax-advantageous regions.
This bold move is part of Australia’s broader effort to tackle tax avoidance and ensure corporations contribute their fair share.
Under the updated laws, MNCs must provide granular details of their global operations, including:
The reforms align with global initiatives such as the OECD’s Base Erosion and Profit Shifting (BEPS) framework but go further by requiring enhanced reporting in jurisdictions flagged as high risk.
The reforms are expected to enhance public trust in the tax system and demonstrate Australia’s leadership in promoting global tax transparency.
However, critics argue that the new requirements may deter investment, particularly from MNCs concerned about the administrative burden and public exposure of their financial data.
Australia’s tax disclosure reforms represent a significant step forward in the global fight against tax avoidance.
By requiring detailed reporting from MNCs, the country is setting a new standard for corporate transparency.
However, businesses operating in Australia must prepare for increased compliance demands and potential reputational risks.
For companies operating in or expanding into Australia, understanding and adapting to these new requirements is critical to maintaining compliance and minimizing risks.
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The OECD has unveiled a new tool to simplify transfer pricing calculations under the “Amount B” framework.
This development aims to reduce administrative burdens and improve compliance for businesses engaged in cross-border transactions.
The Amount B framework, part of the OECD’s broader initiatives on Base Erosion and Profit Shifting (BEPS), standardises the remuneration for baseline marketing and distribution activities.
The newly released tool automates the calculation of these returns, requiring minimal data inputs from businesses.
For multinational corporations, the tool offers significant advantages. It reduces the time and resources needed for compliance, ensures consistent application of transfer pricing rules, and minimizes the risk of disputes with tax authorities.
Tax professionals have welcomed the tool as a step toward greater simplicity and transparency in transfer pricing.
However, they caution that the tool’s effectiveness depends on its adoption by tax authorities worldwide.
Consistent application across jurisdictions will be essential to avoid double taxation and unnecessary compliance burdens.
This tool is particularly relevant for companies with extensive global operations, as it addresses common pain points in transfer pricing compliance.
It reflects the OECD’s commitment to creating practical solutions that align with international tax standards.
The OECD’s pricing automation tool for Amount B represents a significant advancement in simplifying transfer pricing compliance.
By reducing complexity and enhancing transparency, it should foster greater trust between businesses and tax authorities.
If you need guidance on this article on the OECD Automation Tool Amount B, implementing the Amount B framework or using the OECD’s pricing tool, please get in touch.
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With Donald Trump eyeing another term as U.S. president, the international tax landscape could face significant turbulence.
Trump’s administration has hinted at targeting countries that impose additional taxes on U.S. multinationals.
This raises concerns about retaliatory tariffs and potential conflicts over the OECD’s global minimum tax pact, which aims to ensure large companies pay at least 15% tax wherever they operate.
The OECD’s two-pillar tax reform seeks to address long-standing challenges in taxing multinational corporations.
While many countries, especially in the EU, are implementing these reforms, U.S. Republicans claim the measures unfairly target American companies.
Trump’s administration could respond with punitive tariffs, potentially triggering global economic disputes.
The US plays a crucial role in global economic stability.
A confrontational approach to international tax rules could fragment global cooperation and undermine the OECD’s efforts to harmonize tax systems.
Businesses caught in the crossfire will need robust strategies to navigate these uncertainties.
Trump’s potential return to power adds a layer of unpredictability to the already complex global tax landscape.
As the world adjusts to new tax norms, balancing domestic interests with international commitments will be key to maintaining stability.
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The way multinational corporations (MNCs) are taxed has long been a topic of debate.
With the rise of the digital economy, traditional tax rules have struggled to keep pace, allowing some companies to minimize their tax liabilities by operating in low-tax jurisdictions while earning substantial revenues elsewhere.
Enter the OECD’s Pillar One, a groundbreaking effort to ensure fairer taxation of MNCs by reallocating taxing rights to market jurisdictions.
This article explains what Pillar One is, how it works, and what it means for businesses and governments worldwide.
Traditionally, corporate taxes are paid where a company has a physical presence, such as an office or factory.
However, in the digital era, companies can generate significant profits in countries without having a physical footprint, leaving those countries with little or no tax revenue.
This issue is particularly evident with tech giants that provide digital services globally but pay minimal taxes in the markets they serve.
The lack of a global framework to address this has led to unilateral measures like digital services taxes (DSTs), which complicate international trade and risk double taxation.
Pillar One seeks to address these issues by establishing a standardized global approach.
Pillar One is part of the OECD’s Two-Pillar Solution to address the tax challenges of the digital economy.
It focuses on reallocating taxing rights so that countries where consumers or users are based can claim a share of the tax revenue from the profits generated there.
Despite its ambition, Pillar One faces several hurdles:
Pillar One represents a seismic shift in global taxation.
For governments, it promises fairer tax revenues from MNCs operating in their markets.
For businesses, it provides a unified framework that reduces the risks of fragmented and overlapping tax regimes.
While it may require significant adaptation, Pillar One seeks to create a more equitable and predictable global tax system.
Pillar One is a bold and necessary step toward addressing the challenges of taxing the digital economy.
By reallocating taxing rights to market jurisdictions, it aims to ensure that profits are taxed where value is created.
However, successful implementation will require unprecedented global cooperation and careful management of potential pitfalls.
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Thailand has taken steps to align itself with global tax standards by approving a draft law to implement a 15% global minimum corporate tax.
This measure targets multinational corporations with annual global revenues exceeding €750 million, aiming to ensure fairer taxation and reduce profit-shifting to low-tax jurisdictions.
The global minimum tax is part of a broader effort spearheaded by the OECD to address base erosion and profit shifting (BEPS).
The aim is to ensure that large multinational enterprises (MNEs) pay a minimum level of tax regardless of where they operate. By implementing this measure, Thailand seeks to:
Thailand’s adoption of the 15% minimum tax reflects its commitment to global economic cooperation.
The reform aligns the country with over 140 jurisdictions that have pledged to implement the OECD’s tax framework.
While the reform is seen as a progressive step, it raises questions about its impact on Thailand’s investment attractiveness. Key considerations include:
Thailand’s approval of the global minimum corporate tax signals its dedication to modernizing its tax system and fostering international cooperation.
However, the measure’s success will depend on effective implementation and balancing revenue generation with maintaining investment appeal.
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Country-by-Country Reporting (CbCR) is a tax transparency measure introduced by the OECD as part of its Base Erosion and Profit Shifting (BEPS) initiative.
CbCR requires large multinational companies to report detailed information about their operations, profits, and taxes paid in each country where they do business.
This information is then shared with tax authorities to help them detect tax avoidance practices, such as profit shifting to low-tax jurisdictions.
CbCR applies to multinational companies with global revenues of more than €750 million.
These companies must file an annual CbCR report that provides a breakdown of their income, profits, taxes paid, and other economic activities in each country where they operate.
For example, if a company has subsidiaries in 10 different countries, it must provide information on how much revenue each subsidiary earns, how much profit it makes, and how much tax it pays in each country.
This level of detail helps tax authorities identify where a company might be shifting profits to avoid taxes.
as introduced as part of the OECD’s effort to tackle tax avoidance by multinational companies.
Before CbCR, it was difficult for tax authorities to see the full picture of a company’s global operations.
By requiring companies to disclose their activities on a country-by-country basis, CbCR gives tax authorities the information they need to detect tax avoidance schemes.
This reporting helps ensure that multinational companies are paying their fair share of taxes in the countries where they actually do business, rather than shifting profits to tax havens.
Country-by-Country Reporting is a critical tool for improving tax transparency and combating tax avoidance.
By requiring large multinational companies to report detailed information about their global operations,
CbCR helps tax authorities ensure that companies are paying their fair share of taxes and operating in a fair and transparent manner.
If you have any queries about this article – What is country by country reporting? – then please do get in touch.