Ireland finally joins deal on global tax reform
ireland finally joins deal on global tax reform

Ireland finally gave in, on October 7 the country signed the historic OECD agreement for a minimum global corporate tax. The country is known for its attractive tax system which has enabled it to host the European headquarters of Facebook, Microsoft, Apple, and even Google.

Ireland is resisting

Dublin was not easy to convince to drop its 12.5% ​​corporate tax rate. To achieve this result, common ground has been found. It resulted in a modification of the final text. Two words have disappeared, ” at least “. Ireland was concerned that the corporate tax was set at ” at least “15%. She saw it as an open door to a future increase in this minimum rate.

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A fear that is not absurd, the rate of 20% has long circulated during the negotiations of this global tax. He was supported in particular by the Biden administration, spearheading the project. Paschal Donohoe, Irish Minister of Finance, praised the result, “ I truly believe that where we are now is balanced and represents a fair compromise, reflecting the interests of the many countries involved. ».

The country has long feared this global tax, which could call into question the fiscal interest of the country so beneficial for its growth. In a surveyIrish Times, 59% of Irish respondents wanted the tax rate to be maintained at 12.5%, only 26% preferred participation in the OECD agreement.

US pushes deal

The aim of the agreement is indeed to better distribute tax revenues. They will go where the multinationals’ customers are, rather than where their headquarters are. Technology companies, the implicit target of the project, are not the only ones concerned. All companies with at least 750 million turnover will be affected.

The Irish example was emulated the same day by another European country, Estonia. Janet Yellen, US Secretary of the Treasury, picked up her phone to convince Kaja Kallas, Estonian Prime Minister. The latter considered that the agreement does not ” will not change anything for most Estonian economic operators and will only concern subsidiaries of large multinationals », Reports The world.

Janet Yellen welcomed both decisions. She hailed a deal ” on the way to bringing about a change like only one per generation, creating a minimum tax rate worldwide “. Difficult to prove him wrong as the approach is so unique.

134 countries have already signed. Among the few holdouts is still Hungary, but that could quickly change. Orban government’s Foreign Minister Peter Szijjarto announced meeting with US Secretary of State in Paris Antony Blink. At the end of the meeting he estimated “ that there are chances »That an agreement be reached.

Global taxation by 2023?

On the American side, enthusiasm is the order of the day, but one unknown remains. European countries, France in the lead, will they, in accordance with their commitments, abolish their digital taxes once the global tax is implemented?

This is probably one of the topics of discussion at the enlarged OECD meeting on 8 October. 139 countries are gathered to discuss the final details of the text and find a general policy agreement. A G20 interministerial meeting will be held the following week, with global tax on the agenda. The goal is to implement it by 2023.

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