Ireland will not support global tax reform plans, Finance Minister Paschal Donohoe insisted Thursday (15 July), entrenching its hold-out position as momentum builds for a deal meant to ensure multinationals pay a fair share.
More than 130 countries have already agreed to reforms on international taxation, including a minimum corporate rate of 15%.
On Saturday, finance ministers from the G20 — the 19 largest global economies plus the European Union — backed the historic deal.
But Ireland — which levies a 12.5% corporate tax rate and is considered by some a “tax haven” — will not endorse the plans as they stand, said Donohoe, who is also President of the Eurogroup.
“What is on the table at the moment is an agreement that Ireland cannot be part of,” he told Irish state broadcaster RTE.
“We are committed to the negotiation to see if we can enter the agreement at some point, but I’m making the case for 12.5%,” Donohoe said.
“It has been a key feature of our economic policy now for decades.”
His comments came after the Irish Examiner reported that Dublin plans to relinquish its 12.5% rate for fear of international “pariah” status.
“Ireland will continue to make the case for the rights of small countries to retain some competitive advantage, but we don’t want to be an outlier in terms of a global tax deal,” a senior government source was quoted as saying.
The newspaper reported Ireland plans to make concessions on its 12.5% rate — which has lured numerous US tech and pharmaceutical firms to its shores — as part of a new OECD tax agreement in October.
But Donohoe said that agreeing to 15% proposals would create “issues” for “people who’ve invested in our economy, and have expectations regarding the predictability of our rate in the future.”
Ireland’s economic growth figures are regularly warped by the presence of multinational firms and on Thursday the Central Statistics Office (CSO) said that the national gross domestic product (GDP) grew by 5.9% in 2020.
The jump was higher than initial projections and bucked a worldwide downturn caused by the coronavirus pandemic.
“This growth has come from a very small number of sectors with, limited domestic employment,” Donohoe said in a statement.
“I have said since the onset of the pandemic that GDP is not an accurate measure of what’s going on in the Irish economy, and this view has been re-enforced by today’s numbers.”