Donohue says Ireland may support global tax deal

Finance Minister Paschal Donohue, the chancellor, said Ireland could join the board of directors to support a global deal to reform corporate tax as negotiations develop in the coming months.

The Irish government has refused to join the G7 and G20 in backing proposals for corporate tax reform that would set a 15 per cent minimum corporate tax, warning that it could cost the Treasury more than 2 billion euros a year.

But Mr Donohue suggested Irish support could be possible after he met US Treasury Secretary Janet Yellen, who was in Brussels to lobby EU member states to support a minimum corporate tax rate and coordinate on how the deal could be sealed. Specific schedule for the month of October.

«Ireland will continue to engage in negotiations and the process within the OECD, all the way through October,» said Mr Donohue.

«While the challenges of an agreement are evident at the moment, the challenges of not having an agreement are equally or equally real,» he added.

“In the interest of stability, and in the interest of the principles that we talked about today with Secretary Yellen, an agreement has been made, and I will do my part, to see if Ireland can be a part of it and if we can support it later in the year.”

Ms Donohue had a breakfast meeting with Dr Yellen before she held a series of meetings with senior EU leaders and with the Eurogroup, the group of finance ministers that Mr. Donohue currently chairs.

In a letter to finance ministers, Dr Yellen urged laggards, including Ireland, Estonia and Hungary, to drop their opposition, arguing that countries need reliable sources of revenue and tax systems that do not exacerbate inequality.

“We need to put an end to the diversion of corporate income to capital income to low-tax jurisdictions, and to accounting tricks that allow them to avoid paying their fair share,” Dr Yellen told Finance Ministers.

«We need to make sure that the globalized economy does not continue to shorten our middle classes so that it remains open and free, thus encouraging economic growth and business certainty,» she added. «This race to the bottom must end, and by working together we can make sure that it will.»

‘clear delineation’

At the breakfast meeting, Mr. Donohoe discussed issues with Dr Yellen in his capacity as head of the Eurogroup, and the two spoke separately on matters relating to Ireland, as Finance Minister, he said.

There is a very clear separation between the two topics. «We have exchanged views on our position,» Mr. Donohue said.

“It was really constructive, really positive. We both understand how important the agreement is, and we both understand the work that needs to be done hoping to get somewhere better and agree in October.

“I assured her of what I just said publicly, which is my desire to play a part in this. So there is a lot of work ahead over the next weeks or months, and I will be taking a full part in that.”

Earlier, the European Commission announced it would halt work on a digital tax that was expected to be proposed this week as a way to raise funds to repay the massive borrowing to fund a 750 billion euro Covid-19 recovery package, in a sign of the growing momentum towards a deal.

Washington has long been wary of any tax that appears intended to take a slice of tax revenue from American tech giants, and Dr Yellen has persuaded the European Union that the tax should be set aside to prioritize the global tax deal and to mitigate potential problems for the US tech giants. Agreement to pass Congress.

«We fully respect the importance of the challenge this type of issue poses for Ireland, and appreciate the involvement of the Irish government and Pascal personally,» EU Economics Commissioner Paolo Gentiloni said after the meeting.

«It is a top priority for us,» he added. “This is also the reason why we have decided to put our proposal on hold on the digital tax, and our agreement with Secretary Yellen to work together, the United States and the Commission to make this agreement possible, because it is very important after this crisis to have an important agreement on this.”