(London) Irish Finance Minister Pascal Donohue has expressed “reservation” over the idea of a minimum international corporate tax rate in a country that attracts multinational corporations through favorable tax breaks.
“I have a reservation for the lowest rate of effective tax rates in the world, which is mainly related to the impact on competitiveness,” Donoho told reporters Tuesday.
These reservations “particularly concern small and medium-sized economies, which allow companies to use lower tax rates and use them in their competitive model,” he said.
Ireland has applied a corporate tax rate of 12.5% since 2003, which is relatively low compared to other European countries and many developed countries.
The country is accused of practicing “financial dumping” to attract multinational companies that have set up European headquarters there and have recently made significant contributions to its growth.
“Ireland and other countries will take this situation to the OECD,” continued Donoho, the Organization for Economic Co-operation and Development, which is leading efforts for international cooperation in taxation.
The minister rejected the notion that Ireland had contributed to an international “competition” in terms of tax breaks. He said despite the rate hike, the country’s tax laws have undergone several changes in recent years. Not even “changed”.
However, he acknowledges that “the global context of the debate over corporate tax policy has evolved as a result of the epidemic.”
The US Treasury, with the support of the IMF, has won the admiration of countries such as France and Germany, and the possibility of setting a minimum corporate tax rate globally is approaching.
One such reform aimed at ending tax competition between countries was on the menu of the G20’s large moneylenders virtual meeting on Wednesday. However, they are happy to declare that they are committed to finding a comprehensive and consensual solution. […] By the middle of 2021 ”.
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