A comprehensive tax deal is approaching as Ireland refuses to sign

A comprehensive tax deal is approaching as Ireland refuses to sign

The photo was taken in Dublin, Ireland

Jorgo Kausa / IM | Eye | Getty Images

Ireland has agreed to sign a comprehensive agreement raising the corporate tax rate to 15%, marking a major policy change.

Earlier this summer, Group of Seven and Group of Twenty agreed to join efforts to tackle and streamline tax evasion around the world. If the plan is implemented, multinational companies will be forced to pay taxes wherever they operate – not just where they are – and will be charged a lower corporate rate of 15%.

The Republic of Ireland has one of the most attractive business rates in the world at 12.5% ​​and has so far refused to join the scheme. The low rate was strongly opposed by various Irish governments, claiming that it was a tool to lure companies into a smaller economy.

The government has approved a corporate tax increase of 12.5% ​​to 15% for companies exceeding 50 750 million, Irish Radio RTE reported on Thursday evening. The news was later confirmed by Irish Finance Minister Pascal Donohue.

“When we joined the agreement, we had to remember that 140 countries were involved in the process, and many of them had to make concessions,” Donhoy said.

“But I believe the agreement that the government has agreed to sign so far is balanced and represents a fair agreement that reflects the interests and contributions of the many countries involved in the negotiations.”

The Irish Ministry of Finance estimates that joining this comprehensive agreement will reduce the country’s tax collection by 2 billion euros ($ 2.3 billion) per year, according to the RTE. In addition, an Irish Times poll showed that the majority of Irish voters do not need to adjust government policy now.

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However, Ireland’s change of position follows a revised lesson. The initial agreement referred to a lower corporate tax rate of “at least 15%”, but was revised to just 15%, indicating that this rate would not increase at a later date. Ireland has promised to keep rates low for country-based small companies.

Speaking to CNBC on Wednesday, Hungary’s Minister of Foreign Affairs and Trade Peter Sigzarto said that in the initial talks, the corporate tax rate was 21%, up from the current 9%. So the new 15% level is in the meantime, he said.

Hungary has not yet ratified a comprehensive tax treaty. However, the minister said Budapest would be more eager to join if the 10-year implementation period is approved.

Meanwhile, French Finance Minister Bruno Le Meyer, who publicly supports the global tax deal, told CNBC on Wednesday that a global tax dealAt a distance of one millimeterFrom accessing it.

“The important thing is that an agreement on the new international tax system is approved by the end of this month,” he said in Paris.

Next week, between the Washington meetings or the G-20 meeting in Rome at the end of October, the final agreement will be signed within the international tax system, he added.

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