Global Tax Reform and Ireland – Introduction
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?
Ireland and the 12.5% Rate
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.
The OECD Global Minimum Tax
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.
What’s Changing in Ireland?
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.
What Does This Mean for Businesses?
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.
Global Tax Reform and Ireland – Conclusion
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.
Final thoughts
If you have any queries about this article on corporate tax reform, or tax matters in Ireland then please get in touch.
Alternatively, if you are a tax adviser in Ireland and would be interested in sharing your knowledge and becoming a tax native, then there is more information on membership here.