The American Chamber of Commerce has said its members believe Ireland will remain a global location of choice for US investment, despite plans by President Joe Biden to change the tax laws for a new global minimum tax rate for American multinational companies.

The move, if passed by Congress, would increase the minimum tax on US corporation's overseas earnings to 21% and the tax would also be calculated on a country-by-country basis.

Experts say if the proposals were to become law, it could potentially impact the attractiveness of Ireland as a location for foreign direct investment from US firms.

"AmCham's members believe that whatever the eventual outcome of the tax deliberations in the US, Ireland will remain a global location of choice for US global investment, due to our established reputation for world-class talent and innovation and the important role our member companies in Ireland play in global supply chains, as well as certainty in economic policy," said American Chamber of Commerce Ireland chief executive, Mark Redmond.

"In a recent survey 94% of AmCham members reported that their US headquarters has a positive rating of Ireland as location for investment – a finding borne out by recent landmark announcements."

The chamber emphasised the importance of tax certainty for business and the need for pro-growth business tax policies at this time in order to promote the recovery in global trade and investment.

It also underlined the importance of global corporate tax reform which is currently being addressed globally through the OECD process.

"AmCham understands the proposals are at an early stage and will most likely face a lengthy review and amendment process through the Houses of Congress  and notes the Senate will produce its own proposals next week," Mr Redmond said.

"There is already strong opposition building to the proposed business tax increases from key US business groups including the US Chamber of Commerce."
Brian Keegan, Director of Public Policy at Chartered Accountants Ireland, said the issue is not so much about how much corporation tax is being paid in the US by an American multinational with operations abroad, but how much of the tax that is paid by those companies overseas can be used to offset their bill in the US.

"At the moment, pretty much all of it is," he told Morning Ireland on RTE Radio One.

Mr Keegan said changes have already been coming since 2013 as part of the OECD tax reform process.

"It is a challenge for Ireland because in most western developed countries, corporation tax accounts for one in every ten euros paid. In Ireland it is closer to two in every ten euros," he said.

"So if there is a challenge to the amount of corporation tax collected in Ireland, that is troublesome for you and me and everybody else because it means the tax has to come from somewhere."

But he said we also have to think about what a change to the tax system will mean for investment into the country and the key here is the relationship between the US and the rest of the world, rather than the relationship between just the US and Ireland.

"If all countries are being treated by the US in exactly the same way I think we compete on traditional merits of access to the European market, highly skilled workforce, English speaking, stable legal system," Mr Keegan added.

"So really what we need to see, fundamentally, is how the US will treat tax paid abroad as distinct from how much tax they actually want to get overall from their companies."