PASCHAL IS BIDEN TIME
…but pressure grows to sign up to tax deal
THE US is working to persuade Ireland to join an agreement signed this week by 130 countries backing a new minimum tax rate for multinationals.
Ireland was one of just nine countries not to sign up to the new crossborder corporate tax rate which would be higher than the current Irish rate.
The deal will help create momentum for President Joe Biden’s push to increase corporate tax rates at home, while helping to raise revenue needed for a variety of investments, the president’s advisor Brian Deese told reporters at the White House.
Officials from 130 of the 139 countries taking part in talks, led by the Organisation for Economic Cooperation and Development on Thursday, agreed to the broad overhaul of rules for taxing international companies.
However, Ireland was one of a handful of states that refused to sign up despite expressing “broad support” of the 15% tax rate proposal.
Successive governments have maintained a 12.5% rate since 2003, making Ireland the European base for a raft of US companies, especially technology and pharmaceutical firms whose profits have swelled during the pandemic. Finance Minister Paschal Donohoe said he had communicated Ireland’s “reservation”, but insisted the country “remain committed to the process and aim to find an outcome that Ireland can yet support.” Mr Deese said: “This is a process. We’ve going to keep working at it. We’re not there. This is a milestone in the process, but a real strong signal of momentum toward the ultimate goal.”
German Finance Minister Olaf Scholz said after a meeting with US Treasury Secretary Janet Yellen that he expected rapid implementation of the global tax deal by the EU despite the refusal of several members to sign the deal.
“I am optimistic,” he said, adding that he expected the Group of 20 major economies to join the Group of Seven (G7) nations in endorsing the plan at next week’s G7 finance officials meeting in Venice.
The OECD said an implementation plan and other remaining issues will be finalised by October, with the deal expected to be implemented in 2023. The head of the International Monetary Fund, Kristalina Georgieva, on Thursday also urged holdout countries to join the deal, saying it would be in their own interest to do so.
This is a process… we’re going to keep working at it BRIAN DEESE ON NEW MULTINATIONAL TAX DEAL