The Irish Finance Minister praised the compromise on global tax reform.
(Photo: Reuters)
Dublin, Berlin Ireland is still supporting the planned global tax reform and is giving the mammoth project a boost. The government followed his recommendation, said Finance Minister Paschal Donohoe on Thursday. “That is the right decision, a sensible and pragmatic decision.” He assumes that the agreement will give the economy stability and planning security in the long term.
The EU Commission had assured Ireland that it wanted to stick to the global tax rate and not seek an increase for the EU member states. Donohoe said his country will certainly continue to be an attractive location for international investments.
The industrial nations organization OECD is coordinating the project of 140 countries, which is to adapt the international tax rules to the digital age. Insiders had recently told Reuters news agency that Ireland would now probably be on board after concessions. In the case of the planned minimum tax for large corporations, there is only talk of exactly 15 percent – instead of the previous “at least 15 percent”.
Ireland is giving up the previous tax rate of 12.5 percent for large international corporations. However, this quota should continue to apply to companies that have an annual turnover of less than 750 million euros, as the Irish government said, citing the EU Commission. Tax breaks for research and development should also remain.
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The OECD is to provide information on the current status on Friday. 134 countries have so far supported the project. In the course of the month, the final green light is to be given at the level of the 20 leading industrialized and emerging countries (G20), after a basic framework was approved in the summer. In addition to the minimum tax, a new form of taxation of digital services is planned. Emerging countries should get more tax revenue.
An agreement could be reached in October
Large Internet corporations such as Amazon and Google in particular are accused of paying comparatively few taxes through clever shifting of profits. Ireland, Cyprus and Luxembourg are the main beneficiaries of this in Europe; internationally they are tax havens. Because the corporations are also considered the winners of the Corona crisis, this is seen as lacking in solidarity in many countries.
OECD chief Mathias Cormann said he was optimistic that an agreement could be reached in October that the G20 countries would support. According to experts, the plans are designed in such a way that Ireland did not have to participate. However, the project is getting a boost with Ireland as one of the most important low-tax countries in the EU. Recently, Hungary and Estonia have also been skeptical.
More: Pandora Papers: The fact that politicians of all people use tax havens is causing outrage