Corporate Tax

New corporate tax charge of 15% is unlikely to be thought of – US Treasury Secretary

US Treasury Secretary Janet Yellen said the new 15% global minimum tax rate is unlikely to be changed.

Ms. Yellen met with Finance Minister Paschal Donohoe in Dublin on Monday for a bilateral meeting to discuss progress on the newly agreed OECD global tax rate.

She denied that Ireland, which had long defended its corporate tax rate of 12.5%, had been “persuaded” to sign the agreement.

Ireland is believed to have successfully opposed a provision in the Transaction that would fix the tax at “at least” 15% on fears that it could be increased further.

Ms. Yellen seemed to rule out further increases in the future.

Speaking from Government Buildings, she said, “I think we agreed that 15% is the global minimum tax.

“Now, of course, individual countries can decide for themselves whether to introduce a higher tax, but I expect many countries to adopt the 15 percent tax.

“I don’t think there’s much agreement on that.

“It works for a lot of countries and I don’t think that’s something that is being considered as a global minimum.”

The European Commission will prepare proposals for the implementation of the new tax rate in the coming weeks, said Minister Donohoe.

Mr Donohoe, who is also President of the Eurogroup of Treasury Ministers, declined to comment on rumors that the first pillar of the deal could not pass the US Congress.

However, he said efforts at the EU level should encourage the US to do its part.

He said, “In order to increase the effort that we are all making, we all know we need to move together.

“It is for this reason that in the coming weeks and months you will see the Commission begin to develop its proposal.

“And again we hope that Secretary of State Yellen can point to the progress and the fact that the friends and partners of the United States are playing our part in making this change happen.”

“We have absolute confidence in the work currently underway on this historic shift in America.”

“But this is a global change, so that everyone can trust that it will happen, we must all do our part.”

Ms. Yellen also denied that the United States “persuaded” Ireland to reduce its corporate tax rate from 12.5% ​​to the new global minimum of 15%.

She said, “Well, personally, I really wouldn’t use the word cajole.

“I think we have had very productive meetings trying to understand Ireland’s position on these tax negotiations and their needs for a signature.

“Also, Minister Donohoe has done a great job of understanding the US perspective. I think we’ve had a very productive exchange of views over the past few months. “

She added, “Ireland may have had the low tax rate once important in attracting countries to Ireland.

“But we firmly believe that Ireland, as a country with a well-educated workforce and an excellent business environment, has tremendous advantages and that this will continue to serve Ireland’s economic interests.”

Ms. Yellen said the OECD agreement was vital to ensure that companies around the world pay their fair share of taxes.

“We had a so-called race to the bottom on corporate taxation, and no country really won that race,” she said.

“We were all forced to compete with each other and lower tax rates.

“And the only way to really end that and have a system that promotes the interests of all countries.

“It’s not about some countries against other countries.

“We must all agree that we must at least establish a minimum level of global taxation so that companies here in Ireland and the United States and around the world bear their fair share of the tax burden.

“And it’s not all that affects workers or creates a situation where we cannot invest in our economies and our people.”

The deal is said to cost the Irish treasury around two billion annually in lost revenue, but Donohoe has insisted the decision is in the country’s long-term economic interest.

He said, “This is about the government making the decision that it is in our long-term economic interest, that we are in an agreement that will stabilize global tax policy, and that an issue is predictable that has been in the past Years was uncertain and volatile. “

“In this environment, I am absolutely confident that our country will be competitive, will last, retain and attract jobs.

“But we will do so from a strengthened position of legitimacy within a global architecture that seeks to respond to problems that citizens in Ireland and America and around the world expect to change.”

Ms. Yellen also met U2 frontman Bono on her visit to Dublin and tweeted a photo of the two with the headline: “It’s a beautiful day”.

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