The Daily Update: Ireland Relents / Non-Farm Payrolls

Ireland, one of the last bastions of hope for multinationals looking to reduce their tax bills, has finally relented in the face of international pressure, and agreed to raise its corporate tax rate from 12.5% to 15%, starting 2023. They join more than 130 nations that already accepted the Organization for Economic Cooperation and Development recommended minimum tax rate. Paschal Donohoe, the Irish Finance Minister, told a press conference that the deal was struck after they had “secured the removal of ‘at least’ in the text as we sought. Some countries wanted higher minimum tax rates, and our position moderated those ambitions and views. This provides certainty in the agreement”. Estonia, another holdout to the deal, also conceded, announcing it would sign.

Ireland did achieve two other key demands. First was that it will continue with the 12.5% tax level for its SMEs, impacting 160,000 firms employing 1.8 million and allow multinationals to keep trimming their Irish tax bill by tapping write-offs that incentivise research and development spending.

Also today we had September’s Non-farm Payroll numbers. The estimates before the figures were for 500k jobs added (although the whisper was slightly higher) an unemployment rate of 5.1% and participation rate of 61.8%.

The actual number of jobs added was just 194k with the previous month’s figure revised up to 366k from 235k. The unemployment rate was lower at 4.8% versus the prior month’s reading of 5.2% and the participation rate fell slightly to 61.6%. The average hourly earnings also edged higher at 0.6% against 0.4% expected keeping the yoy figure at 4.6%.