Corporate Tax

The state can choose out of the worldwide company tax treaty, says Donohoe

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

Even so, one EU commissioner said he was “pretty confident” that a global agreement can be reached. Donohoe met with EU Economic Commissioner Paolo Gentiloni in Dublin on Monday and discussed the Organization for Economic Cooperation and Development (OECD) proposals for a global corporate tax rate of “at least” 15 percent.

Mr Donohoe went on to say he stressed “that ‘at least’ is deeply problematic for Ireland”. The minister is facing international pressure to accept the OECD’s proposals and Ireland is one of only a few countries to oppose the plans. 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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