The world is inching closer to a global corporate minimum tax, and Ireland, one of the few holdouts, appears to be getting on board.
Ireland has resisted a minimum tax deal because of its famously low 12.5% rate. But Eamon Ryan, Ireland’s environment minister, said on Tuesday that he is “hopeful and confident that [Ireland] will be able to be part of the solution here,” according to the Financial Times.
The remarks come in the run-up to Friday’s meeting of the Organization for Economic Cooperation and Development. Previous language in the agreement had specified that the rate would be set at “at least 15%.” While details of the OECD’s dealings this week have not yet been released, the “at least” is expected to be dropped.
IRELAND HOLDING OUT AGAINST GLOBAL MINIMUM TAX AFTER YELLEN MEETS WITH FINANCE MINISTER
Inclusion of the “at least” language, indicating the final framework could present a higher tax than the floor, had reportedly been a sticking point for the Irish during talks.
Leo Varadkar, the deputy head of Ireland’s government, said the revised OECD text “does respond to a lot, if not all, of the concerns” that his country had with the wide-reaching deal. The apparent softening of Ireland’s position has generated hope among some other OECD members for the deal’s future.
“It will all come down to what happens at the OECD meeting this week, followed by meetings in Washington, D.C., and Rome,” said Bruno Le Maire, the French finance minister, this week. “It’s in the next 15 days or so that we will determine if we can get a definitive agreement or not on a new international tax system for the 21st century.”
Ireland is one of just seven of the 139 countries that are part of the global minimum tax negotiations that have not signed on to an agreement for a global minimum tax of at least 15% on international businesses. The other six countries are Estonia, Hungary, Kenya, Sri Lanka, Barbados, and Nigeria.
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Irish support, like that of Estonia and Hungary, is key to implementing the new regime because all European Union members have to agree to tax reform proposals. The OECD will need every EU state on board in order to make a minimum tax effective in Europe.
