Corporate Tax

Macron denies having pressured Eire over corporate tax reform

In light of the sharp differences with Ireland, French President Emmanuel Macron claimed yesterday that he was not trying to pressure Dublin to support a new global corporation tax deal.

Mr Macron’s remarks were swiftly dismissed by Irish sources who said French officials, at meetings in Dublin yesterday, urged Ireland to support a revision of global tax rules by the Organization for Economic Co-operation and Development. “They pushed for us to join the OECD,” said an Irish personality.

Despite the disagreement in private exchanges, Mr. Macron struck a positive note and expressed his confidence that “together we will find the right path” with regard to taxes.

Although Ireland is one of the few countries that has refused to support the OECD’s plan for a global tax on corporate profits of “at least” 15 percent, the French president said the framework made sense.

“I’m not someone who pressures my friends. I know your country is having a debate. What you have done in the past has been unique and based on a low corporate tax, ”he said at a press conference in Dublin. “The world after Covid-19 is different. It requires that we change the classic business model. “

Ireland’s 12.5 percent tax rate on corporate profits has been causing tension for decades with France, which claims it is too low. Although most countries in the world have backed the OECD plan, it remains highly problematic for governments, having for many years insisted that the rate would never change.

Deep fear

In discussions with French counterparts, Irish officials signaled a general willingness to support the OECD plan, but only if the requirement that the rate should be “at least” 15 percent no longer applies.

This reflects the deep concern in Dublin that the adoption of the OECD plan in its current form would open the door for Brussels to try to set a higher rate – at an uncertain level – if the plan is implemented into EU law . Ireland believes that such a regime would jeopardize foreign direct investment policies.

“We said that was ‘at least’ the big issue,” said an Irish personality during talks with France. “We can’t sign up for something if we don’t know what we’re signing up for.”

French officials said they recognize that Ireland wants confirmation of actual future tax rates. Although Irish sensitivities were recognized in Paris, French officials were left with no commitment as to whether or not to do anything about it.

French Finance Minister Bruno Le Maire told reporters that Ireland and France are working on a European approach to a minimum corporate tax rate.

But senior Irish sources said Dublin’s focus is the OECD process, which is separate.

A high-level source noted that during its EU presidency in the first half of next year, France is likely to propose European measures at a minimum rate, but this will require unanimity, which means Ireland could potentially block the proposal.

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