Ireland is one of nine countries that have refused to sign the OECD’s agreement on the global minimum tax for multinational corporations. During the summit, the states agreed to impose a 15% minimum rate on multinational companies and redistribute tax revenue based on profits.
However, these terms were not acceptable to Ireland, which forced the world’s largest multinational companies to relocate thanks to a 12.5% tax. According to the Gaelic Department of Finance, the deal will cost the country more than 2 billion a year. Too much, in the opinion of the Irish finance minister and president of the Eurogroup, Pascal Donohue. “I can’t accept the contract, especially with regard to the 15% minimum limit,” he explained.
Tech companies such as Google, Apple, Facebook, Microsoft, Yahoo, and pharmaceutical giants such as Pfizer, Johnson & Johnson have a strong presence in Ireland, according to Tony Foley, professor of economics at Dublin City University Business School, which is part of the “Gaelic” economy. “These multinationals represent 90% of our manufacturing exports, employ 10% of our workforce and help the country recover from its debt. Without them we would be very close to the situation in Greece or Portugal.”
Ireland said it was ready for talks to extend the deadline for defining technical aspects until October. “I have expressed our reservation, but we are in favor of the program with the aim of finding conditions that can support our country,” Donoho explained.
The finance minister said he had approved “Pillar One” of the agreement, which proposes to redistribute tax revenue to various countries on the basis of profits. For Donohue, the system “provides stability and assurance to the international tax system”; However, the minister is not ready to accept the minimum tax threshold of 15%. “As October approaches, we will have clear ideas about the terms of the agreement and discussions will continue.”
Other non-treaty countries include Estonia and Hungary, which levy a 9% tax on multinational corporations, as well as other tax hubs such as Barbados, St. Vincent & the Grenadines, and two African countries, who have expressed concern about the impact of the terms on Kenya, Nigeria and developing countries.
In contrast, countries such as Luxembourg and Poland, which rely heavily on the tax revenue of multinational corporations, have agreed to cooperate. The historic decision comes in the wake of an investigation by the International Consortium of Investigative Journalists in 2014, which allowed 340 companies around the world in Luxembourg alone to benefit from special tax agreements. 1%. Now, however, in Donoho’s opinion, it will be difficult for ministers who have agreed to cooperate financially to justify themselves before the country. “Any minister who decides to cooperate will be held accountable to parliament and the government for their decision,” he concluded. (all rights reserved)
Prone to fits of apathy. Unable to type with boxing gloves on. Internet advocate. Avid travel enthusiast. Entrepreneur. Music expert.