Ireland and Estonia join historic global tax reform agreement

Ireland and Estonia join historic global tax reform agreement

It was one of the last major stages of a major global tax reform discussed under the auspices of the OECD, which gained strength when US President Joe Biden came to power. The Irish and Estonian governments agreed on Thursday (October 7) to raise their corporate tax rates to join the global tax reform agreement, removing one of the last obstacles to the project’s success.

After “Detailed discussions, Government approves my recommendation to join Ireland International Convention” Irish Finance Minister Pascal Donohue told a news conference about the tax.

“This is a very important step.” In global reform, the finance minister explained. To reach a compromise, the wording of the agreement now speaks to corporate tax at the lowest effective rate of 15%, henceforth“At least 15%”, He added, Dublin opposed it because it opens the door to future hikes.

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In the process, the Estonian Prime Minister announced that Tallinn had joined the agreement. Who does not “Most Estonian financial operators will not make any changes and will only consider affiliates of large multinational corporations.”, a souligné Kaja Kallas.

All eyes are now on Hungary, one of the remaining countries that have not yet signed the treaty. Written by Hungarian Foreign Minister Peter Sigardo FacebookAfter a meeting with US Secretary of State Anthony Blink in Paris on Wednesday: “Hungary is ready to compromise if we can agree to an agreement that does not adversely affect the Hungarian economy. (…). Based on the discussions in Paris, I think this is likely to happen. “

Continue to be an “attractive destination”

After months of blocking, Irish leaders in a country with one of the lowest rates in the world, with a corporate tax rate of 12.5%, increased their statements on Wednesday, indicating that they were close to a compromise.

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The historic agreement, announced in July under the auspices of the OECD and signed by 134 countries, will oblige multinational companies with a turnover of at least 750 million euros, including several large technology groups.

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Mr Donohue welcomed the deal on Thursday “Of course” In his opinion, Dublin is allowed to continue “A fascinating destination” For companies. “This is an important decision for our industrial policy and for our future. it’s complicated. There will be consequences, but there are plenty of opportunities., He assured.

US Treasury Secretary Janet Yellen welcomed the Irish and Estonian decisions. She felt like one “On the way to bringing about a change like one per generation, it creates the lowest tax rates in the world, which balances competition and promotes employment and investment in the United States.”.

The reform aims to fight the tax evasion of multinational companies, mostly Americans, which are registered in countries with the lowest tax rates, at a time when countries are seeking funds to restore public finances damaged by the Pandemic.

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By signing this agreement, Dublin is shaking up its low-tax financial model, which has helped attract many multinational companies, especially technological or pharmaceutical giants, whose European headquarters are registered there.

According to the commissioned survey The Irish Times, A large portion of the Irish were in favor of keeping the corporate tax rate at 12.5%, which has enabled the country to achieve rapid economic growth over the past twenty years.

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“Refistology de Rich’s Iris”

The deal drew criticism from Oxfam, which mourned Thursday “What could be the historic pact to end the era of tax havens, instead becoming the patchwork of rich countries.”.

“The tax rate proposal [minimum] Globally, 15% would serve rich countries and increase inequality. The G7 and the European Union will recover two-thirds of the new tax revenue but the poorest countries make up only 3%, while they represent more than a third of the world’s population., Susanna Ruiz, head of tax policy at Oxfam, lamented.

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The “Framework containing” The OECD, an expanded format that unites 139 countries, convenes on Friday to try to approve the final parameters of the reform ahead of next week’s G20 ministerial meeting. The goal is to implement the reform by 2023.

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