Malcolm Owen
In the wake of G7 countries agreeing on a global minimum tax rate to stop major organizations like Apple from moving cash across borders to minimize tax payments, Ireland is apparently seeking a "compromise" on the plan.
On June 5, finance ministers from the G7 group of nations agreed to shut down tax loopholes and to try and cut down efforts by multinationals to reduce their tax payments, by pledging to a minimum global corporation tax rate of 15%. The group also agreed to introduce measures to ensure taxes are appropriately paid in countries where the firms operate.
In an interview with CNBC on Friday, Irish Finance Minister Paschal Donohoe hinted the country will push back against the plan, which is now being discussed at the OECD level, and soon by G20 leaders.
"What we are going to do is engage in the OECD process very intensely across the coming weeks and months, and I do hope an agreement can be reached that does recognize the role of legitimate tax competition for smaller and medium-sized economies," said Donohoe. "I do believe it is in the interest of everybody to find a compromise."
The pushback from Ireland is induced by it being the home of major corporations such as Apple and Google, which have taken residence in the country partly because of its low corporation tax rates. With a globally-agreed minimum corporate tax rate, this would eliminate favorable tax terms as a benefit that Ireland could offer to companies to stay.
In the case of Apple, such levels were deemed illegally low by the European Commission, ordering Apple to repay 13 billion euros ($15.5 billion) in back taxes. While the second-highest EU court favored Apple and Ireland in 2020, the EU said in February it would appeal the decision.
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11 Comments
Not surprised Ireland is going to fight this like heII. Being a corporate tax haven has been a huge source of income for the country.
Who thinks that you will get 10 US Republicans to agree to this, even a couple of moderate Democrats ? It will have to be ratified by Congress like all international agreements to be binding. It's not only the tax but the "loss" of sovereignty for the US tax set at any rate the American Congress selects, whether 0% or 50%. That alone will kill it.
Anyone who thinks any large corporation affected by this doesn't already have plans to move to yet another tax haven, outside the EU (pronounced "ewww!"), I have some waterfront property in Arizona I'd like you to look at. Lots of sandy beach...