Ireland will be increasing corporation tax from 12.5% to 15%.
The country will be signing up to a global tax reform for minimum rate internationals. Small and medium enterprises won’t be affected by the new rates.
Its previously low tax rates led to both Facebook and Apple basing their headquarters in Ireland.
Irish finance minister Paschal Donohoe said: “The government has now approved my recommendation that Ireland joins the international consensus. This is the right decision, it is a sensible and pragmatic decision.”
“We will remain an attractive location and ‘best in class’ when multi-nationals look to investment locations,” he said.
“These multinational enterprises support our economy with high-value jobs and at the same time, Ireland provides a stable platform and a long proven track record of success for MNEs choosing to invest here,” he added.
The new rate will affect companies that have an annual turnover of over €750m (£636m).