London Daily

Focus on the big picture.
Tuesday, Mar 17, 2026

Ireland’s low-tax miracle is over

Ireland’s low-tax miracle is over

For a generation, Ireland has had the lowest corporate tax rate in the developed world. It now looks as if Ireland's low-tax miracle is over.
Okay, in fairness it might be the weather. Or the craic in the bars. Or the rugged coastline, golf courses, or the lakes. And yet for all its charms, there was always a far simpler reason why more than a thousand multinational companies have their main European headquarters in Ireland. Tax.

For a generation, Ireland has had the lowest corporate tax rate - just 12.5 per cent - in the developed world. Even better, myriad breaks and allowances - in accounting circles the ‘Double Irish’ is not as you might imagine an especially stiff glass of Jameson’s but a fiendishly clever way of re-routing revenues - often take that down even further.

The result? Companies from Apple to Google to Pfizer have huge operations in Ireland, creating tens of thousands of jobs, and an economy that is among the most prosperous in the world.

But hold on. It now looks as if Ireland's low-tax miracle is over. First, President Biden, despite getting sentimental of his family's roots in County Mayo whenever he faces an electorate he thinks might celebrate St Patrick’s Day, is proposing a global minimum corporate tax rate of 21 per cent.

That won’t make a lot of difference to France (28 per cent), or Germany (30 per cent) or indeed the UK (19 per cent, rising to 25 per cent). But it will make a heck of a big difference to Ireland.

In effect, it will have to double its rate. Now the European Union has joined in. According to a report in the Irish Times, the Commission is pushing for the Irish to end its tax breaks as a condition of receiving its share of the money set to be distributed through the €750 billion Coronavirus Rescue Fund. Raise taxes or you don’t get the cash is the message from Brussels.

In fact, the EU’s position is very odd. Ireland is a net contributor to the EU’s budget, now that the UK has left, so it will be a net contributor to the Rescue Fund as well. In effect, Ireland is being told that in exchange for paying for a bail-out for Italy and Spain it will be forced to wreck the competitiveness of its own economy.

Understandably, Ireland is starting to push back against that. In a speech last month, the finance minister Paschal Donahue attempted to make the argument that smaller countries should be allowed lower levies to compensate for the economies of scale enjoyed by their rivals.

Really? As it happens. Ireland is a member of the world’s largest Single Market, so it can hardly complain its economy lacks scale. In fact, the only credible argument Ireland can make is that as a sovereign nation it is perfectly entitled to set any tax rates it chooses. However, as enthusiastic Europeans that is a tricky one.

And yet, in truth, nothing else will work. Between Biden and Brussels, Ireland is getting caught in a trap. It is hard to see how it can avoid raising its corporate tax rate to 20 per cent-plus to bring it into line with the rest of the developed world.

Of course, it will still have a skilled workforce, the English language, and access to the European market to recommend it to the world’s multinationals as a corporate base. But its four decades as a low-tax corporate hub are coming to an end - and with it four decades of buoyant prosperity may be over as well.
Newsletter

Related Articles

0:00
0:00
Close
UK Security Adviser Viewed US-Iran Nuclear Deal as Within Reach Before Sudden Escalation
UK Prime Minister Urges Continued Focus on Ukraine Amid Escalating Iran Conflict
UK Introduces New Safeguards to Shield Lenders from Bank Run Risks
UK Promotional Products Market Surpasses £1.3 Billion as Demand Strengthens in 2025
Reeves Pushes for Deeper UK-EU Economic Ties to Revive Growth
UK Security Adviser Saw No Imminent Iranian Nuclear Threat Days Before War Erupted
France Signals Warm Welcome for UK Return to EU Single Market Amid Renewed Cooperation Talks
UK Defence Official Criticises Boeing Over Delays to E-7 Wedgetail Programme
UK Urged to Secure Quantum Talent as Minister Warns Against Repeating AI Setbacks
UK Mayors Set to Gain New Spending Powers Under Reeves’ Fiscal Devolution Plan
Western Allies Urge Restraint as Israel Weighs Expanded Ground Operation in Lebanon
Trump Warns NATO Faces ‘Very Bad’ Future Without Stronger Allied Support in Iran Conflict
UK Minister Says Britain Not Bound to Support Every Demand From U.S. President
Starmer Tells Trump Britain Will Not Be Drawn Into Wider Iran War
Starmer Tells Trump Britain Will Not Be Drawn Into Wider Iran War
UK Set to Introduce Steel Tariffs of Up to 50 Percent in New Industrial Strategy
European Governments Decline Trump’s Call to Send Warships to Reopen Strait of Hormuz
Fears Over Iran Conflict Weigh on UK Consumer Confidence
Starmer Says UK Working With Allies on Hormuz Shipping Plan After Trump Raises Pressure
Iran War and Energy Shock Shake Britain’s Economy and Political Debate
Deadly Meningitis Outbreak at UK University Leaves Two Dead and Several Seriously Ill
Deadly Meningitis Outbreak at UK University Leaves Two Dead and Several Seriously Ill
King Charles and Queen Camilla Share Personal Tributes to Their Mothers on UK Mother’s Day
Prince William Honors Princess Diana with Mother’s Day Tribute
UK Economy Stalls in January as Households Cut Back on Eating Out
AI-Generated Singer Becomes Viral Voice for Iranians With New Anthem
London Private Club Founder Plans Exclusive Palm Beach Venue Near Trump’s Mar-a-Lago
Ed Davey Urges Britain to Build Fully Independent Nuclear Missile Capability
What the UK Covid Inquiry Is and How It Investigates Britain’s Pandemic Response
What the UK Covid Inquiry Is and How It Investigates Britain’s Pandemic Response
US Treasury Links British Polo Patrons to Alleged Venezuelan Oil Proceeds Laundering Scheme
Hundreds Gather in London Despite Ban on Annual Pro-Palestinian March
Two Dead and Multiple Students Seriously Ill After Invasive Meningitis Outbreak at UK University
UK Considers Deploying Ships and Mine-Hunting Drones to Reopen Strait of Hormuz
Starmer and Trump Discuss Urgent Need to Reopen Strait of Hormuz Amid Escalating Iran Conflict
Prince Harry and Meghan Markle’s Planned Australia Visit Draws Mixed Reaction From Local Communities
Trump Calls on France and UK to Help Safeguard Strait of Hormuz Shipping Route
Boris Johnson Labels Bitcoin a ‘Ponzi Scheme’, Sparking Debate in Crypto World
UK Considers Targeted Aid for Vulnerable Households as Energy Costs Rise
Stellantis Urges Immediate Review of UK Electric Vehicle Sales Targets
Home Office Reverses Course to Allow Some Dual Nationals to Enter UK Using EU Passports
Reform UK Proposes Replacing Top Civil Servants With Officials Aligned to Government Agenda
Netflix Adds Critically Acclaimed ‘Best Film of 2025’ With Perfect Rotten Tomatoes Score
‘The Sums Don’t Add Up’: UK Farmers Hit by Soaring Costs as Iran War Disrupts Global Supplies
Confidential UK Biobank Health Records Found Online After Researchers Accidentally Expose Data
Trump Urges Britain and Allies to Deploy Warships to Safeguard Strait of Hormuz
Trump Urges Britain and Allies to Deploy Warships to Safeguard Strait of Hormuz
Middle East War Highlights Strategic Importance of Strong UK–Ireland Cooperation
Weak Growth Signals UK Economy Was Faltering Even Before Middle East Energy Shock
Marks & Spencer Tops UK Fashion Retail Rankings as Most Considered Brand
×