Ireland one of nine countries refused to sign OECD global tax deal
DUBLIN: Ireland has refused to sign the OECD Agreement on Global Corporate Tax Reform. Ireland is one of nine countries that have not ratified the agreement. The historic agreement was signed by 130 of the 139 countries, and it sets a tax rate of at least 15% on multinational corporations. Ireland has always maintained that it should be allowed to make independent and competitive decisions in this regard. The contract signing deadline is in October.
The Minister for Finance Paschal Donohoe said he is fully committed to reforming the global corporate tax regime. The Minister stated that Ireland could support many of the elements agreed upon by 130 countries, but has reservations about a 15% minimum tax rate. Mr. Donohoe said that Ireland’s tax rate has remained 12.5% for decades, which has kept the country competitive. He plans to launch a public consultation program on the OECD negotiations.
The European Union countries Estonia and Hungary, as well as Barbados and Saint Vincent & the Grenadines, and the African countries Kenya and Nigeria have not signed the agreement. China and India signed the agreement after weeks of negotiations.
Ireland’s decision not to sign is a major political decision made by the government. All major countries support the agreement, so the government is concerned that it may face some difficulties in standing aside.
The Department of Finance has previously estimated that the deal would cost Ireland more than €2 billion in annual tax revenue. The signing of this agreement will prevent Ireland from remaining competitive. Therefore, it is expected that the Finance Department would make a decision in this matter only after a public debate and opinion formation. The Finance Minister is hopeful that a decision will be made by October.
At a recent meeting of G7 finance ministers, it was agreed to impose a global tax rate of at least 15% on the income of major corporates.
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