Tax deal ‘won’t kick in till 2023’

A HIGHER rate of corporation tax won’t come into effect until 2023 if Ireland signs up to the global tax agreement, Finance Minister Paschal Donohoe has indicated.

Over 130 countries have already signed up the Organisation for Economic Cooperation and Development agreement for a global minimum tax rate of at least 15% – but Ireland has yet to commit.

Speaking after a virtual meeting of G7 finance ministers, Mr Donohoe told reporters he expressed his concern with his counterparts over the wording of the deal – particularly the inclusion of ‘at least’ in relation to the tax rate.

The minister said he expects to receive an ‘updated text’ on the agreement from the OECD in the coming days, which the Government will consider.

‘The ambition here is for us all to arrive at an agreement which gives certainty and long-term stability in the long-term framework and I will continue to work towards delivering that goal,’ he told reporters at Government Buildings.

Mr Donohoe said that if Ireland were to sign up to the tax deal, it would not come into effect for at least a year.

‘So the OECD agreement will not influence our budgetary calculations for next year, because the implementation period for us will not include the agreement actually being executed next year; it will take longer than a single year for that to happen. And that’s already been reflected in our budgetary figures,’ he said.

‘The effect of this is one that will appear really across the medium term, beginning I believe most likely from 2023, onwards.’

The G7 stated after yesterday’s meeting that agreement must be reached among the 140 countries who are involved in the negotiation at an OECD inclusive meeting on October 8.

Mr Donohoe’s comments come after Taoiseach Micheál Martin told the Dáil that Ireland had not signed up to the OECD deal due to ‘lack of certainty’ over the agreement.