The republic’s corporate tax rate of 12.5 percent will remain in place in the coming years, Finance Minister Paschal Donohoe has predicted in comments that will increase the stake in negotiations on international steps to a global minimum tax rate.
In an interview with Sky News, asked if he expects the 12.5 percent rate to remain in place for the next five to ten years, the minister said, “Yes, I do. I assume that there will continue to be a place for such a tariff and for low tariffs. “
The US is strongly calling for a global minimum rate for large corporations, with the Biden government proposing a minimum rate of 21 percent for the international profits of its own companies, which has yet to be negotiated with Congress.
Mr Donohoe’s interview with Sky was taped a week ago on May 18th. Two days later, on May 20, officials told Treasury Secretary Janet Yellen that the US would be ready to accept a global minimum rate of 15 percent in the OECD talks, well below its own proposed rate.
As a result, the US has tried to push for a statement from the G7 Treasury Ministers, who are meeting on Friday the next day, to support a global minimum. In the Sky interview, the minister reiterated that he had “significant reservations” about the US plan for a global minimum, “at such a level that it means that only certain countries and economies of a certain size can benefit from this base – us have really big concerns. ” about the.”
While expressing his confidence in the future of the 12.5 percent rate, Mr Donohoe said that he believed that such a rate – a low rate – should be a feature of an agreement going forward. It is not clear whether these form of words were intended to leave room for negotiation in the talks to come. The Minister said he expected to discuss the matter further with Secretary Yellen.
Mr Donohoe has argued that smaller countries like Ireland are allowed to compete for investment with lower corporate tax rates. He said the Irish interest rate had played an important role in the state’s economic development, although it was now only part of the country’s offer to foreign investors.
The OECD talks are fueled by a desire to prevent large companies from shifting profits to different locations around the world in an attempt to reduce their tax burdens.