Minister for Foreign Affairs Simon Coveney has insisted that the Government has not yet made a decision on the corporation tax rate, following the comments by France's economy minister Bruno Le Maire that Ireland had changed its position on the 12.5 per cent rate.
In remarks to journalists, Mr Le Maire said there had been discussions with Minister for Finance Paschal Donohoe among other key stakeholders, and that the minimum taxation rate was no longer a significant sticking point as negotiations intensify towards a Friday meeting on the issue.
Indications are that a key change in wording on the future minimum rate may have cleared the way for Ireland to support the deal. Sources say that previous wording of "at least 15 per cent" as a target for the global minimum rate is no longer in the text. Ireland had feared this would have left the way open for the European Commission and other member to seek a higher rate when a directive was put in place to implement the new deal in Europe.
“I welcome the evolution of the Irish position, in particular on Pillar 2,” Mr Le Maire told journalists, referring to the part of the draft OECD agreement that sets out a minimum 15 per cent corporation tax rate.
“A compromise can be reached on a rate of 15 per cent,” he added. “It is not the rate that poses the most difficulties today. We see that Ireland is in the process of evolving on this subject, and that a compromise can emerge around 15 per cent as the real effective rate.”
Decision
Mr Coveney on Tuesday told People Before Profit TD Richard Boyd Barrett that “the French finance minister can say whatever he wants but our Government has not had a recommendation yet as the basis for a decision”.
Mr Boyd Barrett raised the issued in the Dáil and said: “Ireland is almost alone in trying to defend the pitiful levels of tax” that multinational corporations pay. “How can you possibly justify this when these multinationals are robbing citizens of this country and the world in billions of tax revenue that could be going into housing, health, infrastructure and education?”
Mr Coveney said: “Minister for Finance, Deputy (Paschal) Donohoe, is doing a very good job in defending Ireland interests, while at the same time recognising the reality of where this debate is moving.”
When Mr Boyd Barrett said that the French minister had said “the decision is already made”, Mr Coveney said the Government had not yet received a recommendation on which to make a decision.
But he hoped Mr Donohoe “will be able to bring a recommendation to Government on Thursday about Ireland’s approach on international efforts”.
Earlier on Tuesday, calling on the Government to make a statement on the matter, Sinn Féin finance spokesman Pearse Doherty criticised the fact that information on the Government's position had come from the French minister.
“On the 14th of July the Minister for Finance came before the Finance Committee and restated his objective to secure an agreement that accommodated the 12.5 per cent rate,” said Mr Doherty, adding that it was clear the Government had “utterly failed” to achieve the objective.
He said: “We believe this is in part due to the reputational damage caused by successive governments actively facilitating tax avoidance and aggressive tax planning through schemes such as the Double Irish and stateless companies.
“We are not party to the negotiations nor have we had sight of the updated text. We are now in a ludicrous situation where the French finance minister is offering greater clarity on the Government’s current position in these negotiations than the Government itself.”
Following Mr Le Maire's comments, Ged Nash, the Labour Party's finance spokesman, said: "It is gratifying to see discernible movement which brings Ireland closer to the point where the Minister [for Finance Paschal Donohoe] feels he can sign Ireland up unequivocally to the entire OECD process."
Mr Nash said he had earlier called on the Minister to sign up to Pillar 2. He said: “It seems that it is only now at the eleventh hour that the Government has adopted this strategy, having prevaricated over the intervening period and damaged our standing with key allies. This has caused more uncertainty than was necessary.
"Nothing has been confirmed yet and we await confirmation of Ireland's formal position. This is a matter for the Irish Government and Minister Donohoe, and not for the French Minister. Nothing should be confirmed until everything is confirmed."
