Corporate Tax

No assure that Eire will meet the 12.5% ​​corporate tax price

Taoiseach Micheál Martin said he will not promise US companies “one way or another” that Ireland will maintain its corporate tax rate of 12.5 percent.

It comes as Ireland comes under pressure to sign an Organization for Economic Co-operation and Development (OECD) plan for a global corporate tax rate of at least 15 percent. Ireland is one of only a handful of countries that are resisting the plans.

Mr. Martin is in New York attending United Nations meetings and also supporting the work of IDA Ireland, which is tasked with attracting foreign investment to Ireland.

The 12.5 percent rate has been a cornerstone of Ireland’s strategy to bring jobs to Ireland for decades.

When asked if he would tell US companies that Ireland had committed itself to the 12.5 percent rate, Mr Martin said he would not make any “one way or another” commitments to individual companies.

He later stressed that talks on the OECD deal were ongoing.

Earlier, Treasury Secretary Paschal Donohoe said Ireland may remain outside the tax treaty amid concerns about “deeply problematic” aspects of the plan to tax corporate profits around the world.

Nonetheless, EU Economic Commissioner Paolo Gentiloni, who was in Dublin for talks on Monday, said he was “pretty confident” that an agreement can be reached.

After their meeting, Mr Donohoe said he stressed “that ‘at least’ this is deeply problematic for Ireland”.

Mr Donohoe said the state is “within the process of the OECD, but we are not currently in the agreement. I emphasized the enormous challenge and importance of this process for Ireland and how central the stability of corporate tax policy is to our economy. “

He warned Ireland’s position may not change.

“I remain determined to see if the process can lead to an outcome that Ireland would consider joining. But I have also told my colleagues that where we are not currently in the agreement, we have a position that could be continued, ”he said.

“I am very clear that it is not appropriate for Ireland to be included in the agreement. That can continue to be the case. But we are also working very hard to see if an agreement is possible that allows Ireland to join. “

The government also wants clarity on whether the US Congress will accept the plan before deciding whether to move.

Mr Gentiloni said it was “nonsense” to claim that the US is not centrally involved.

“Let me acknowledge that if we have a chance to achieve this success, it is mainly due to the initiative and pressure of the US government. But of course we need the Member States of the European Union on board, because this is not the case – at the moment -. And of course the Americans will do their part, but I cannot imagine a global agreement without the central role of the USA, that would be complete nonsense. . . It is thanks to the United States that this global agreement. . . is now being discussed. “

He said there are 134 countries that signed the deal in the preliminary stages, “so of course the US will be there.” The Commissioner also expressed confidence that an agreement could be reached despite Irish concerns.

“Yes, I am confident that we can reach an agreement, a global agreement. I think the answer to that question eight months ago would have been negative. What has of course changed in the last period is the new commitment of the US administration. “

Mr Donohoe reiterated that any recommendation he makes to the government in the coming weeks on the OECD agreement will be guided by what is in the best interests of the country.

“Every decision we make will have consequences. The decision to move outside an OECD framework will have ramifications. Ireland’s decision to sign an OECD agreement will also have an impact on national tax revenues. And we are positively investing our energy and engagement with the OECD and with the Commission to see if an agreement is possible. But we’re still a bit away from that, ”said Donohoe.

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