In its economic column, the responseIrish Times Rocket, coming soon: “This could be bad news for Ireland in the long run. “ A few hours ago, U.S. Secretary of the Treasury Janet Yellen revived the idea of a minimum corporate threshold for imposing a global corporate tax and raised the bar to a very high 21%. The idea is not new, but international discussions have turned upside down, and the intervention of the world’s leading economic power is changing the situation.
This change would be profound for a country like Ireland, which has had a 12.5% corporate tax rate the backbone of its economic policy for decades. If the plan goes that way, Google, Facebook and other Intel in the Irish Islands will have to pay 12.5% to the Irish state (as is currently the case) and 8.5% more states in the United States (21% difference).
Mr. Irish Government responded with caution.I Yellen, but without any excitement. “We hope this proposal will be widely scrutinized and intensified in the United States.”, Explains the Ministry of Finance, which expects the US Congress to weaken the proposal. He recalled that 139 countries at the level of the Organization for Economic Co-operation and Development (OECD) were part of the tax negotiations and the final agreement had to be finalized. “Large and Small, Developed and Developing Countries”. It is clear that Ireland intends to slow progress.
“They’re not going to leave overnight.”
Confirms Fiergal O’Rourke, a tax specialist at PWC. It will be difficult for Europe to get a unanimous agreement at a rate other than the lowest in Europe. So the European minimum rate could be around 10% to 12.5%. “ Currently, Hungary has the lowest rate at 9%, followed by Ireland.
However, the impact of the Irish minimum tax ceiling will not be the same as it was twenty or thirty years ago when Ireland was the center of appeal. Although the 12.5% rate is a symbol that no Irish government wants to touch, many tax loopholes have been closed recently. Says a montage Double Irish, which allowed companies to pay far less than the official 12.5 percent, is now banned, for example.
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