IRELAND: Donohoe Still Sees Minimum Corporate Tax Deal Being Delivered.

As published on bloomberg.com, Wednesday 20 July, 2022.

Ireland still expects a global deal for a minimum corporate tax rate of 15% to be implemented, despite hurdles in its progress passing through the US Congress.

The OECD tax agreement process is “unfolding exactly as I expected it would,” Ireland’s Finance Minister Paschal Donohoe said in an interview with Bloomberg Television. “I still expect, as we move through this year and as we move into 2023, that we will see the second pillar of that OECD agreement -- in regard to a minimum effective tax rate -- for that pillar to be delivered,” he said, noting that are always moments of deliberation in moving from agreement to implementation.

A vast overhaul of corporate taxation won support from 136 countries in October, as governments resolved key differences over the level of a global minimum rate and an end to new digital taxes. Ireland was one of a few hold-outs before the agreement and sought assurances of US support from Treasury Secretary Janet Yellen.

Ireland has a long-standing corporate tax rate of 12.5% and the sector accounted for a quarter of total tax receipts last year.

“Overall, I still think we’ll make progress within the European Union and I believe globally later on in the year we will see progress on that rate,” he said.

Even so, “if we do end up in a position where no progress is made on the rate it will pose a challenge to the overall OECD agreement and open up new risks, new challenges and the risks of unilateral action,” he said. “I believe it’s in our interest to avoid that.”