The Republic of Ireland is known throughout the world for attracting foreign investment through its low corporation tax rate, which now stands at 12.5%. Northern Ireland, by contrast, follows the UK-mandated 20% rate. Not surprisingly, Northern Ireland has struggled in recent years to woo foreign direct investors away from its closest neighbor.Provided that certain political hurdles can be overcome, competition between the two border countries for foreign investment may become more balanced over the next few years after the introduction of new tax legislation.
Earlier this month, UK Chancellor George Osborne announced his Summer Budget to Parliament. The Budget made news in the UK and beyond primarily for its plan to raise the UK’s National Living Wage at the same time that it cuts welfare benefits. While the new minimum wage requirement is noteworthy for multinationals operating in the UK, there are other aspects of the Budget that will more seriously affect those businesses, for better and worse.