Donohoe: We cannot agree to sign up to 15% corporation tax

FINANCE Minister Paschal Donohoe has insisted that the Government is committed to its 12.5% corporation tax rate, despite pressure to sign up for a new global agreement.

The G7 Finance ministers previously agreed to support a plan to introduce a minimum global corporation tax of at least 15%. This was later backed by the majority of the 139 Organisation for Economic Co-operation and Development members.

Mr Donohoe said yesterday that the Government wasn’t happy that the new international rate would be ‘at least 15%’, which suggests that the OECD could select a higher figure over time.

However, Ireland was one of just nine states who objected to the deal. Speaking at Government Buildings yesterday, Mr Donohoe insisted that while Ireland is ‘broadly supportive’ of the OECD’s new tax plan, it can not agree to the higher corporation tax rate.

He once again insisted the Government will fight to maintain its 12.5% tax, explaining that the agreement does not contain the ‘clarity’ that Ireland needs.

‘My concern over the proposed commitment to a rate of at least 15% for global minimum effective tax rates meant I couldn’t join the agreement,’ he said. ‘Ireland is engaging constructively in these discussions and will continue to play our part to see if a comprehensive and historic agreement can be reached.’

Mr Donohoe added: ‘We are completely committed to protecting that rate and making the case for it. I believe the 12.5% rate in itself will continue to be a really important part of our tax policy in the future.’

Mr Donohoe made the comments as he launched a public consultation programme on the text of the OECD agreement. He would not be drawn on whether there would be a rise to the 12.5% rate in Budget 2022 in October.

‘I just want to reiterate my complete commitment to standing over the 12.5% rate,’ Mr Donohoe added.