Ireland joins World Tax Reform World Agreement

To achieve a compromise, the text of the agreement is now talking about a minimum effective rate tax of 15%, and no more than “at least 15%”, a formulation to which Dublin was opposite.

Le Monde with AFP

It was one of the last key steps of a vast global reform of traded taxation under the Aegis of the OECD and resumed by the arrival of the President of the President American, Joe Biden. The Irish Government has accepted Thursday 7 October to take up its corporate tax rate for Dublin to join the global tax reform agreement, thus raising one of the last barriers to the completion of the project.

After “Detailed discussions, the government approved my recommendation that Ireland joins the international consensus” on taxation, said the Minister of Finance, Paschal Donohoe, at a press conference.

“This is a very important step” in the world reform, explained the Minister of Finance. To achieve a compromise, the text of the Agreement is now talking about a minimum effective rate tax of 15%, and no more than “at least 15%”, “he said, a wording To which Dublin was opposed because it left the door open to future increases.

Staying “an attractive destination”

After blocking months, Irish leaders, whose country displays a tax rate on companies of 12.5%, one of the lowest in the world, had multiplied Wednesday the declarations suggesting that they were close to a compromise.

The historical agreement announced in July under the patronage of the OECD and signed by 134 countries would impose on the multinationals with at least 750 million euros in turnover, many of which large technology groups.

m. Donohoe praised Thursday an agreement that brings “certainty” and which he said to Dublin to remain “an attractive destination” for companies.

At a time when countries are looking for funds to redress their public finances undermined by the pandemic, this reform intends to combat the tax avoidance of multinationals, largely American, who register in the countries. Lower tax rate.

By signing this compromise, Dublin shakes its low-level economic model that allowed it to attract many multinationals, including technological or pharmaceutical giants, who recorded their European headquarters.

According to the Irish Times commissioned survey, a large part of the Irish was in favor of maintaining the 12.5% ​​corporate tax rate, which has enabled the country to experience rapid economic growth on The last twenty years.

“Rafistolate of rich countries”

The agreement has sparked the criticism of Oxfam organization, which lamented Thursday that “what could have been a historic agreement to put an end to the era of tax havens becomes a patch of rich countries instead” .

“The proposal for a [minimum] global tax rate set at 15% will largely serve rich countries and increase inequalities. The G7 and the European Union will recover two-thirds of new tax revenue but the The poorest countries only 3% while they represent more than a third of the world’s population, “said Susana Ruiz, responsible for tax policies at Oxfam.

The “Inclusive Framework” of the OECD, an expanded format that brings together 139 countries, meets Friday to try to endorse the last parameters of the reform, before a ministerial meeting of the G20 countries next week. The objective is an implementation of the reform by 2023.

/Media reports.