The three member states of the European Union (EU) are Ireland, Hungary and Estonia. Globally, at least 15% tax on companies’ earnings has not been signed in the agreement made this Thursday.
The European Commission hopes that the technical discussions will help change the mind.
Ireland’s reluctance to have one of the lowest corporate income tax rates in Europe is linked to tax deals created by tech giants such as Amazon, Apple and Facebook to settle in the country.
“I hope the Irish government will overcome a serious setback, so to speak. I think they will eventually sign this agreement, because Ireland has many other things to offer foreign companies, if they stay or stay in the country.” .
This Friday, Irish Finance Minister Pascal Donohue called for a “national interest” to justify the rejection.
The agreement was ratified by the Organization for Economic Co-operation and Development (OECD) and 130 countries and organizations representing 90% of the global economy. It is being promoted as a major step by multinational corporations to ensure a fair share of their taxes.
Countries such as China, India, Russia and the USA are on board. Excludes Barbados, Estonia, Hungary, Nigeria, Peru, Kenya, Sri Lanka, St. Vincent and the Grenadines.
“We do not need tax bases or lower tax jurisdictions to be part of the agreement, because once this is done, countries will have access to the difference between what companies actually pay when the tax deduction is a small amount at least 15%. Therefore, the agreement is very strong, there is no risk of creating new tax bases, and quite the opposite, ”said Pascal St.-Amans, director of the OECD’s Tax Policy Center.
Paulo Gentiloni, the European Commissioner for the Ministry of Finance, called the deal a “historic step” and said he was “in the green light” at next week’s G20 summit in Venice.
Additional details must be approved before October.