Ireland's biggest companies to face 15% corporate tax under EU proposals

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Ireland's Biggest Companies To Face 15% Corporate Tax Under Eu Proposals
Among the firms likely to be affected would be Dunnes Stores, Musgrave, Eir and several other big retailers and consumer firms. Photo: PA
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The biggest domestic Irish companies, as well as major multinationals, would face a new minimum corporate tax rate of 15 per cent, under plans to be advanced by the European Commission on Wednesday.

According to The Irish Times, the move comes in a draft directive to be published in Brussels to mandate the Organisation for Economic Co-operation and Development (OECD) plan for a minimum corporate tax rate across the union.

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Earlier this week the OECD published detailed proposals for its proposed minimum effective corporate tax rate of 15 per cent, to apply to multinationals with a turnover in excess of €750 million.

The Republic had earlier signed up to this proposal, but the Government had said that it was its intention to retain the existing 12.5 per cent rate for domestic companies and for smaller multinationals.

However, the commission is set to propose that as well as multinationals, large groups operating in domestic markets are also covered by the new minimum rate rules “in order to ensure compliance with the fundamental freedoms”, which include not discriminating against firms on the basis of origin.

The commission directive, if applied, would involve the imposition of a 15 per cent rate on a small number of major domestic Irish companies, mainly in sectors such as retail and utilities. These companies pay at 12.5 per cent. Among the firms likely to be affected would be Musgrave, Dunnes Stores, Eir and several other big retailers and consumer firms.

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The commission said the directive is framed to be “the essential minimum for securing EU law compatibility” to its rules and will involve a limited number of taxpayers. It generally closely follows the template set out by the OECD.

The Department of Finance has estimated that the OECD plan could cost the exchequer more than €2 billion in annual revenue, though much will depend on the final detail of what is agreed.

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