Ireland was exempted from the agreement on the principle of tax reform by multinational corporations, but agreed to negotiate in the coming months to add its name to the list of 131 jurisdictions signed under the umbrella of the Organization for Economic Co-operation. And Development (OECD).
After an action meeting with US Treasury Secretary Janet Yellen in Brussels on Monday, Irish Finance Minister Pascal Donohue said 131 of the 139 jurisdictions would attend Ireland talks until October to finalize the agreement already signed. Includes discussions. Hope to get the “best” deal.
Despite avoiding himself at this first moment, Dublin always had the door open to enter the boat. “It is in the interests of stability and the principles we are talking about today [segunda-feira] I have reached an agreement with Secretary Yellen and I will do my part to see if Ireland can participate and if we can support it by the end of the year, ”Donoho explained. Irish Times.
Dublin agrees with the first pillar of tax reform, but opposes the design of the second pillar, which globally defines the lowest level of corporate income tax as “at least 15%”.
In the first, laws are defined for the distribution of tax rights over the profits of multinational corporations so that the countries that use the products or the countries that provide the services can claim the right to tax a portion of the greatest rewards. The most profitable companies in the world, even if multinational companies do not have a physical presence in that jurisdiction.
In the second pillar, governments aim to curb profits to the lower or zero-tax jurisdiction and prevent aggressive tax planning, creating a minimum effective corporate income tax rate in which multinational corporations with an annual turnover equal to 750 million or more. They will not be considered wherever they are placed.
Dublin has reservations about this part of the reform because it disagrees with the “minimum 15%” limit.
The general corporate income tax rate in Ireland is 12.5%, and in addition to the specific tax laws for expatriate companies, there are also multinational companies that help pay less effective taxes.
Apple’s case became exemplary in 2016 when the European Commission concluded in 2016 that the US company had achieved tax gains of ക്രമ 13 billion, as it had been able to pay less than 1% of an IRC for several years through tax treaties. (In 2011, Ireland was taxed at 0.05% of gross annual profit; 0.005% at 2014).
Coordinate 27 EU countries
Ahead of Monday’s Eurogroup meeting attended by the U.S. Secretary of the Treasury, Pascal Donoh met with Janet Yellen, and Yellen reaffirmed what he said about the reform: The United States is advocating for a reform that would reduce the transfer of results to lower tax jurisdictions. “Digital gimmicks” that allow multinational companies to pay lower taxes.
Accordingly Irish TimesDonoho said the “exchange of views” between the two was positive and that “there is still a lot of work to be done in the coming weeks or months” to reach an agreement.
The European Commission has already stated that it will recommend the implementation of new minimum income tax laws, but in order for the text to proceed, it is necessary for all member states to approve the proposal, as it is a matter of fiscal nature, and there is a need for legislation to remain in place.
Ireland is not the only EU country currently outside. The other two European countries that have not signed the preliminary agreement are OECD, Estonia and Hungary. In addition to these, jurisdictions in other geographies are excluded: St. Vincent, the Grenadines, Barbados, Nigeria, Kenya, and Sri Lanka.
The European Commission has already confirmed that it has decided to “suspend” tax creation activities, as the reform includes redistribution of tax giants and laws aimed at taxing the results of digital giants. Commission spokesman Daniel Ferry confirmed that focusing on OECD reform requires a “last resort”.