After the G7 countries agreed on a global minimum tax rate to prevent large organizations like Apple from transporting cash across borders in order to minimize tax payments, Ireland is apparently looking for a “compromise” of the plan.
On June 5, the G7 finance ministers agreed to close tax loopholes and reduce the efforts of multinationals to reduce their tax payments by promising a minimum global corporate tax rate of 15%. The group also agreed to put in place measures to ensure that taxes are paid appropriately in the countries in which the companies operate.
In an interview with CNBC on Friday, Irish Finance Minister Paschal Donohoe hinted that the country would oppose the plan, which is now being discussed at the OECD level and will soon be discussed by G20 leaders.
“We will be very involved in the OECD process in the coming weeks and months, and I hope that an agreement can be reached that recognizes the role of legitimate tax competition for small and medium-sized economies,” said Donohoe. “I think it is in everyone’s interests to find a compromise.”
The pushback from Ireland is caused by the fact that it is home to large corporations like Apple and Google that have settled in the country because of the low corporate tax rates, among other things. With a globally agreed minimum corporate tax rate, this would eliminate favorable tax terms as a benefit Ireland could offer businesses to stay.
In Apple’s case, those levels were deemed illegally low by the European Commission and asked to repay € 13 billion ($ 15.5 billion) in back taxes. While the second highest EU court favored Apple and Ireland in 2020, the EU announced in February that it would appeal the decision.
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