London Daily

Focus on the big picture.
Thursday, Apr 16, 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
Meghan Markle Plans Exclusive Women-Focused Retreat During Australia Visit
Starmer and Trump Hold Strategic Talks on Securing Strait of Hormuz Amid Rising Tensions
Unofficial Australia Visit by Prince Harry and Meghan Expected to Stir Tensions with Royal Circles
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
UK Stocks Rise on Ceasefire Momentum and Renewed Focus on Diplomacy
UK to Hold Further Strategic Talks on Strait of Hormuz Security
Starmer Voices Frustration as Global Tensions Drive Up UK Energy Costs
UK Students Voice Concern Over Proposal for Automatic Military Draft Registration
Rising Volatility Drives Uncertainty in UK Fuel and Petrol Prices
UK Moves to Deploy ‘Skyhammer’ Anti-Drone System to Strengthen Airspace Defense
New Analysis Explores UK Budget Mechanics in ‘Behind the Blue’ Feature
Man Arrested After Four Die in Channel Crossing Tragedy
UK Tightens Immigration Framework with New Sponsor Rules and Fee Increases
UK Foreign Secretary Highlights Impact of Intensified Strikes in Lebanon
UK Urges Inclusion of Lebanon in US-Iran Ceasefire Framework
UK Stocks Ease as Ceasefire Doubts in Middle East Weigh on Investor Confidence
UK Reassesses Cloud Strategy Amid Criticism Over Limited Support Measures
UK Calls for Full and Toll-Free Access Through Strait of Hormuz Amid Rising Tensions
Starmer Signals Strategic Shift for Britain Amid Escalating Iran-Linked Tensions
UK Issues Firm Warning to Russia Over Covert Underwater Military Activity
OpenAI Halts Stargate UK Project, Casting Uncertainty Over Britain’s AI Expansion Plans
Starmer Voices Frustration Over Global Pressures Driving UK Energy Costs Higher
UK Deploys Military Assets to Protect Undersea Cables From Suspected Russian Threat
Canada Aligns With US, UK and Australia as Europe Prepares Major Digital Border Overhaul
Meghan Markle’s Planned Australia Appearance Sparks Fresh Speculation
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
UK to Partner with Shipping Industry to Rebuild Confidence in Strait of Hormuz, Cooper Says
UK Interest Rate Expectations Ease Following US–Iran Ceasefire Agreement
Starmer Signals Major Effort Needed to Fully Reopen Strait of Hormuz During Gulf Visit
UK Fuel Prices Face Ongoing Volatility Amid Global Pressures and Domestic Factors
Kanye West’s Planned Italy Festival Appearance Draws Debate After UK Entry Ban
Smuggling Routes Shift Toward Belgium as Migrant Crossings to UK Evolve
Ceasefire Offers Potential Relief for UK Fuel and Food Prices Amid Ongoing Uncertainty
Iran Conflict Raises Questions Over UK’s Global Influence and Military Preparedness
Senator McConnell Visits Kentucky to Highlight Federal Investment in Local Projects
Kanye West Barred from Entering UK as Legal Grounds Come into Focus
UK Denies Visa to Kanye West After Sponsors Withdraw from Wireless Festival
Trump-Era Forest Service Restructuring Leads to Closure of UK Lab Focused on Kentucky Woodland Health
Foreign Students in the UK Describe Harsh Living Conditions and Financial Pressures
Reform UK Proposes Visa Restrictions on Nations Pursuing Reparations Claims
Public Reaction Divides Over UK Decision to Bar Kanye West
Calls Grow for UK to Review US Base Access Following Concerns Over Escalating Rhetoric
UK Indicates It Will Not Permit Use of Its Bases for Potential US Strikes on Iran’s Energy Infrastructure
UK Prime Minister Defends Decision to Bar Kanye West, Questions Festival Booking
UK Accelerates Efforts to Harmonise Medical Technology Rules with United States
Wireless Festival Cancelled After Kanye West Denied Entry to the United Kingdom
Australia’s most decorated living soldier was arrested at Sydney Airport and charged with five counts of war-crime murder for the killing of unarmed Afghan civilians
The CIA’s Secret Technology That Can Find You by Your Heartbeat Successfully Locates Downed Airman
Operation Europe: Trump Deploys Vance to Hungary to Save the EU
King Charles Faces Criticism From Some UK Christians Over Absence of Easter Message
×