18/01/22

IRELAND: Donohoe says OECD tax deal a 'balanced compromise'.

As published on rte.ie, Tuesday 18 January, 2022.

The Minister for Finance has said that Ireland will play an active role in ensuring that the new global corporate tax deal reached last year can be speedily enshrined into EU law.

Last October, Ireland belatedly joined a majority of countries around the globe in signing up to an OECD tax framework that would set a global minimum effective corporate tax rate of 15%.

Ireland had resisted signing up to the 15% global corporate tax figure until the last minute when, after intense negotiations, countries participating in the OECD process agreed to drop the term "at least" when it came to the 15% rate.

The OECD agreement comes in two parts - the first is to force multinationals to declare their profits and to pay more tax in the countries where they do business.

The second is to ensure that signatory countries enshrine the new framework into national legislation. This will be done via an EU directive, a draft of which the European Commission introduced in December.

The French presidency is keen to get the law adopted so that it is in force by January 1 next year.

Addressing fellow EU finance ministers in Brussels this morning, Paschal Donohoe praised the OECD deal as a balanced compromise.

He said Ireland would play an active part in ensuring the new directive, which would have the effect of enshrining the 15% rate in Irish law, will be approved by member states and the European Parliament in a timely manner.

The 15% rate will only apply to multinationals with a turnover of over €750m. The Government insists that those companies under that threshold will continue to pay the traditional 12.5%.