Frustration is growing across the EU on the difficulties in implementing the OECD deal on corporate tax. It all seemed agreed at the end of 2021, but finalising how it will happen is proving very difficult. The part of the deal involving a new agreement on where big multinationals should pay some tax is caught in the sand. And in the EU, Hungary is blocking implementation of the other part of the agreement – the proposed 15 per cent minimum corporate tax rate. The US has agreed a minimum 15 per cent rate in new legislation, but it does not fit in exactly with the OECD plan.

For the big EU countries in particular, promises made to their electorates that the big multinationals would pay more tax are not being met. And so, on Friday, Germany, France, Italy, Spain and the Netherlands issued a joint statement pledging to introduce the 15 per cent minimum effective corporate rate in their countries “swiftly” – ideally by next year. They are promising to go ahead even if the EU cannot meet the required unanimous agreement to introduce a directive to mandate the rate across the EU.

What will Ireland do? For now, the Government will continue to press for an agreement at OECD level – and also the required unanimity to introduce the 15 per cent minimum across the EU. The point of the global minimum is that it would apply across all the main jurisdictions and provide a kind of backstop to stop multinationals shifting profits to avoid tax. Many countries would continue to have a higher corporate tax rate, though for the Republic it would require increasing the 12.5 per cent rate to 15 per cent for the biggest companies.

An EU-wide agreement – or better, one between all the OECD players – implementing the deal would be ideal for Ireland, effectively creating a stable situation. The State will wait and watch for now but, if most of the other EU countries do decide to implement the new 15 per cent minimum rate on a national basis, then we would probably have little option but to follow.