Corporate Tax

Janet Yellen Day in Dublin sees corporate tax dispute apart

It was Janet Yellen Day in Dublin on Monday, with the US Treasury Secretary flitting back and forth between government buildings and events with the American Chamber of Commerce in Ireland and the Institute for International and European Affairs (IIEA). She even tweeted a photo from meeting Bono.

There must have been some tough talks during the behind-the-scenes negotiations between Yellen and Finance Minister Paschal Donohoe that eventually got the state removed from its estimated corporate tax rate of 12.5 percent. But now all the water is under the bridge. Yellen and Donohoe presented a united front yesterday and praised each other and the new global tax treaty at every turn. It was conveyed in an atmosphere of “friendship and cooperation,” said Donohoe. At an event hosted by the IIEA, in which he and Yellen attended, Donohoe spoke of Yellen’s “fundamental commitment” to the negotiations and her staunch opposition to “policies that would further fragment the world economy.” For her part, she said, “Minister Donohoe has done a great job of understanding the US perspective.”

She rejected the talk that Ireland was being “talked into” the deal or that her visit would be about mending fences. “I think we’ve had a very productive exchange of views over the past few months,” she told her about the corporate tax rate. That showed what a “touchstone problem” corporation tax is in Ireland, she said.

Yellen led the call for a minimum global tax rate of 15 percent – a move approved by leaders of the world’s 20 largest economies on Saturday – to end what she long termed the “race to the bottom” in corporate taxation. She said it was vital to ensure that businesses around the world pay their fair share of taxes and that Ireland, with its “educated workforce and excellent business environment”, will continue to thrive at the new rate.

There was no mention of the gentle power pushing the state across the border or Donohoe’s pushback removing the words “at least” from the final wording of the new minimum rate in the agreement. A fine day, as Bono could say.

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