Participation exemption to corporate tax would further state’s ‘business-friendly’ reputation

Department of Finance released a ‘strawman proposal’ examining reform of the taxation of multinational dividends

The overhaul aims to prevent excess taxation of firms operating across multiple jurisdictions. Picture: Rolling News/Leah Farrell

Reforming the taxation of dividends paid out to shareholders of multinational firms would help maintain Ireland’s reputation as “business-friendly destination”, Michael McGrath has said, as his department inches closer to a seismic shift in the corporate tax system.

On Friday, the minister for finance released a “strawman proposal” that lays out a hypothetical example for how a so-called “participation exemption” may apply, and invites further feedback.

The proposal aims to deal with long-standing controversial tax rules for foreign businesses operating here, which means shareholders are double taxed on any dividends received.