Many a big tech firm, including the likes of Google, Amazon and Facebook, use Ireland as an entry point into the UK and Europe, with the nation being a bit of tax haven for multinationals operating in that part of the world.

Ireland’s status as a tax haven is set to change, however, with it joining an international agreement this week that seeks to set a minimum tax of 15 percent on multinational corporations.

“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,” explains a statement by Ireland’s Department of Finance.

The department notes that the agreement contains two key elements, with the first being that will see a reallocation of a proportion of profits to the jurisdiction of the consumer. The second element, which is pertinent to the focus of this story, sees the adoption of a new global minimum effective tax rate applying to multinationals with global revenues in excess of €750 million.

“The agreement represents an important step towards resolving the issues brought about by the digitalisation of the economy which resulted in the international tax framework struggling to accommodate the evolving business models of large multinational enterprises,” it adds.

While the agreement may impact the desirability of Ireland for big tech firms, it looks like the government will still be looking at ways to working with multinational corporations.

“I am confident that Ireland will remain competitive into the future, and we will remain an attractive location and ‘best in class’ when multi-nationals look to investment locations,” noted Donohoe.

“These multinational enterprises support our economy with high value jobs, and at the same time, Ireland provides a stable platform and a long proven track record of success for MNEs choosing to invest here,” he concluded.

[Image – Photo by Alejandro Luengo on Unsplash]