Donohue warns that one-fifth of the OECD’s moves could reduce corporate taxes

Donohue warns that one-fifth of the OECD's moves could reduce corporate taxes

Finance Minister Pascal Donohue has suggested that global change could reduce the republic’s 11.8 billion euros in corporate taxes by one – fifth.

Donohue told the American Chamber of Ireland, which represents major American investors, that the Republic will play its part in the OECD’s efforts to tackle cross-border tax evasion.

He said he was confident an agreement could be reached this year and that it would cost one-fifth of the state’s corporate tax. It was $ 11.8 billion last year.

On Thursday, the United States proposed a minimum global corporate tax rate of at least 15%, which is higher than the state rate of 12.5%. This proposal has been welcomed by many European governments.

Donoh rerssed said he has reservations about any steps towards comprehensive tax coordination rather than dealing with rigorous tax planning.

He said any change approved by the OECD would take into account the stability and certainty with which companies would invest in the future.

Similarly, he said tax restrictions should continue on investment in research and development.

“I do not think small countries can use tax planning as a legitimate tool,” he told the House World Conference.

Donoho added that this includes dishes and industrial heritage enjoyed by many major countries.

The minister said the government is still committed to imposing a 12.5 per cent tax on corporate profits in the Republic.

He pointed out that employees of multinational companies in the Republic pay a similar income tax to their corporations.

But the minister ressed that all this was not unilateral. Ireland is the ninth largest source of domestic investment in the United States. There are 110,000 people working for Irish companies in more than 1,000 locations in 50 states, ”he said.

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U.S. investors in the Republic include Pfizer, which will begin manufacturing Covid-19 vaccines later this year, and computer chip giant Intel and software group Microsoft.

The 800 American companies in the Republic employ more than 180,000 people, and 140,000 people indirectly depend on these companies for employment.

European welcome

Meanwhile, other parts of Europe enthusiastically welcomed the US proposal to raise the global minimum corporate tax rate to 15% on Friday.

“This is a real step forward,” German Finance Minister Olaf Schultz said during a meeting with his European rivals in Lisbon. “This summer and what we’ve been working on for so long will really give us a chance to become a reality.”

The latest move to an agreement between 139 countries is below the 21 percent previously recommended by the U.S. for the foreign exchange earnings of their companies, a level that some countries have overstated.

The OECD discussions on technological complexity, Atlantic maritime conflicts and trade tensions have stalled for years. The upcoming deal raises the possibility of even bigger bills for global companies.

“The main problem is not numbers, but we can live at 15 per cent – this is a good compromise between the expectations of all OECD members,” French Finance Minister Bruno Le Meyer said at the meeting. Lisbon. .

“The key issue is to define a global framework for digital taxes and minimum taxes.”

EU Economic Commissioner Paulo Gentiloni said this was the first step towards reaching an agreement and that Italian Finance Minister Daniel Franco. Mr. Donohue did not consider the matter publicly in Lisbon.

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The two eurozone officials told the meeting that the US offer would receive widespread support in the wider European Union. An official said the 15 per cent rate would be acceptable to all EU member states, including Luxembourg and Ireland.

Speaking to reporters in Tokyo, Japanese Finance Minister Taro Aso said the US proposal represented progress, although more talks were needed. He said the G20 summer meeting is expected to move to global deals, including digital tax, but final deals will not take place until the end of the year.

American Room

A poll by the U.S. House of Representatives shows that four out of five Irish people believe that US companies are important to the future of the Republic. 94 percent said these companies would be crucial to the financial recovery.

Three-quarters said low taxes helped attract multinationals here, but 63% believe the quality of Irish workers is the main reason why U.S. companies are investing here.

However, 63% of respondents said they underestimate the number of people working for US companies, which is less than one lakh and the actual number is not 180,000.

Gareth Lamby, Speaker of the U.S. House of Representatives and Vice President of Ireland’s social media giant Facebook, said the vote showed that the public supports the contributions of American companies to the country. Additional Report: Bloomberg

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