you have heard irish luckbut did you know that this expression has nothing to do with catching a four-leaf clover or a leprechaun? It derives from the gold and silver rushes of the 19th century.
In the 21st century, luck doesn’t come from the dark depths of mines, but from the black ink on tax returns. Ireland’s famously low corporate tax rate is fueling the economy as EU countries fear slipping into recession.
Tech Bros and Shamrocks
Thanks to an attractive 12.5% corporate tax rate, Ireland has long been the rich end of the rainbow accounting for major multinationals. In particular, technology companies and pharmaceutical companies with high international turnover have incorporated in the Emerald Island to extend their tax holidays.
Corporate tax revenue has beaten expectations for the seventh consecutive year, according to the Central Bank of Ireland. This year is no exception. Europe is staring at an energy crisis and war, the world is grappling with record inflation, and Ireland looks like a financial wonderland.
- Ireland’s economy expanded by 6.3% in the second quarter, compared to an average of 0.6% in the European Union (or 0.4% in China and -0.9% in the US). The European Commission expects Ireland’s economy to grow twice as fast as the EU’s this year, and nearly triple that in 2023. It skews economic data for blocks.
- Ireland collected around €9 billion in corporate tax in the first half of 2022. This surpasses last year’s record amount and is on pace to help fund a €7 billion cost-of-living package. To highlight how important the attraction of foreign multinationals is, half of last year’s €15.3bn corporate tax was collected from just 10 companies, including Amazon, Apple, Google, Intel, Meta and Pfizer. rice field.
Ireland, on the contrary, has become dependent on all its income. Trinity University economist John Fitzgerald says he could lose 3-4% of his national income if the corporate tax balance deteriorates significantly. financial timesbut for now, Ireland is “equivalent to households that have just won the lottery,” said Danny McCoy, who heads the Irish Business and Employers Coalition.
Double luck: Ireland’s corporate tax buffer will last until at least 2024. This is because his OECD-led agreement to set the world’s lowest corporate tax rate at 15%, originally set for 2023, has been postponed for a year.good luck sillelag tonight.