Rich countries urge support for global corporate tax deal as Ireland stands firm
Ireland is being urged to join an international agreement that would change where multinationals pay their taxes and introduce a minimum rate of 15%.
he government is one of eight countries still resisting an agreement reached last week by 131 other countries in the Organization for Economic Co-operation and Development (OECD).
Finance ministers from the world’s 20 richest countries meeting in Venice on Friday were expected to approve the deal, but want Ireland, Hungary, Estonia and other holdout nations to join.
“We invite all members who have not yet joined the international agreement to do so,” said a draft statement from the meeting, seen by Reuters.
Ireland “fully” supports the first part of the deal, which would force the world’s 100 biggest companies to pay part of the tax where they make their sales.
But the government has “reservations” about an overall minimum tax rate of 15%, which would force large multinationals to pay additional tax at home if they pay below the minimum rate in countries like Ireland.
The OECD has yet to work out the finer details of the deal, such as how to deal with credits, write-offs or deferred taxes, which will be crucial for companies’ investment decisions.
Other variables include the US domestic tax overhaul, which sets a minimum corporate tax rate of 21%, and the upcoming EU digital tax, which threatens to annoy the US. .
US Treasury Secretary Janet Yellen will travel to Brussels on Monday to meet eurozone finance ministers, including Ireland’s Paschal Donohoe.
However, a senior EU official said a “discussion of taxes would be discouraged”. “We will try to avoid the problem,” the official said.
Group of 20 (G20) finance ministers and central bankers will give their tentative stamp of approval to the OECD deal in Venice on Saturday, with the leaders’ final rubber stamp at the end of October .
At the Venice meeting, the EU was also forced to defend its plan for a carbon border tax, which is due to be published on Wednesday.
It is part of a package to help the EU meet its new emissions reduction target of 55% by 2030 instead of the original 40% target.