Updated 2 hours ago
MINISTERS OF FINANCE FROM seven wealthy nations endorsed US-backed plans for a global minimum corporate tax rate aimed at encouraging multinational corporations – tech giants in particular – to pay more into public coffers hard hit by the pandemic.
The news comes as official data showed Ireland’s economy grew nearly 8% in the first quarter of 2021 during a tough lockdown when most stores closed as multinational corporations’ revenues helped continue the pandemic’s downturn to oppose.
Paschal Donohoe is a world leader who attended the first day of the G7 Finance Ministers Summit in London today when Ireland’s multinational tax practices were featured on the international front pages.
Ministers from the US, Japan, France, Canada, Germany and Italy will attend the two-day meeting at Lancaster House in London, with Donohoe being present as President of the Eurogroup.
The meeting will be hosted by the British Chancellor of the Exchequer, Rishi Sunak, and will take place ahead of the G7 meeting of world leaders in Cornwall next week.
British Chancellor Rishi Sunak welcomes Paschal Donohoe.
Leading up to today’s meeting, European officials are said to be optimistic that the world’s richest countries will support US-backed plans for minimum global corporate taxes.
An agreement on a minimum tax rate for companies is “in sight”, said finance ministers from France, Germany, Italy and Spain, who do not belong to the G7, today.
A broader agreement on the measure is expected at a G20 finance meeting scheduled for July.
In negotiations with the Organization for Economic Cooperation and Development (OECD), US President Biden has called for a uniform minimum tax rate of 15 percent.
Donohoe said last week that Ireland has “significant reservations” about Biden’s plans and wants to keep its tax rate at 12.5%.
News on the front page
The front page of today’s Guardian newspaper today focuses on corporate tax and Ireland’s position in the debate.
Part of the front page of today’s Guardian newspaper.
The report describes that Microsoft’s Irish subsidiary made $ 315 billion in profits last year but did not pay corporate income tax because it is “resident” in Bermuda for tax purposes.
The report finds that the profit generated by Microsoft Round Island One is almost three-quarters of Ireland’s GDP.
In a statement, a Microsoft spokesman said the number refers to, “a one-time event and reflects an internal reorganization, not a cash gain.”
Ahead of today’s meeting, Sunak said he hoped there would be a “global digital tax deal” this year.
“We want companies to pay the right amount of tax in the right place and I hope we can reach a fair deal with our partners,” he said.
Donohoe talks about vaccines
The Irish Treasury Department said ahead of the meeting that the summit’s focus will be on “global recovery” after Covid, adding that the meeting will also “reflect ongoing discussions on the international tax framework”.
With an eye to economic recovery, G7 ministers are expected to consider coordinated approaches to key economic challenges facing post-Covid-19 economies.
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Speaking ahead of the trip, Donohoe said, “With vaccinations accelerating, infections falling and pressure on critical care services gradually easing, there is now a clear light at the end of the tunnel.
“This year the economy in the euro area will recover strongly. In the past year, our economic policy has made a major contribution to facilitating this recovery and shielding our citizens, preserving jobs and enabling our economies to recover strongly. ”
At the meeting, ministers will discuss measures to combat climate change as well as efforts to reach an international agreement on taxation of digital companies.
Minister Donohoe will also hold bilateral meetings with ministers from the US, Japan, Canada and the UK.
He will meet in person with Treasury Secretary Janet Yellen, who held a virtual meeting with her on St. Patrick’s Day.
Sunak is the chairman of the G7’s financial path under the organization’s UK presidency and said the summit was “hugely important”.
“I am honored to welcome my counterparts to London with a renewed spirit of multilateral cooperation,” he said.
Even before we held the G7 presidency, we made our priorities clear – protecting jobs, ensuring green and global recovery, and helping the world’s most vulnerable countries.
“I am determined that we will work together and join forces to address the world’s most pressing economic challenges – and I am very optimistic that we will deliver some concrete results this weekend.”
Includes coverage from Hayley Halpin, Press Association and © AFP 2021