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MINISTER FOR FINANCE Paschal Donohoe has told an Oireachtas committee that he “won’t speculate” on what his final position will be on an international agreement that could end Ireland’s 12.5% rate of corporation tax.
Ireland has been one of a handful of countries so far to reject a proposal that would see over 130 countries adopt a 15% minimum rate of taxation for large corporations.
The United States is spearheading the international push behind the reforms.
Earlier this week, Donohoe met this week with US Treasury Secretary Janet Yellen who hopes to persuade Ireland — along with the other EU holdouts Hungary and Estonia — to back the deal.
Last night, The Irish Examiner reported that the Government is ready to ditch the controversial 12.5% rate and sign up the agreement to avoid becoming an “international pariah”.
But Donohoe told RTÉ’s Morning Ireland programme today that he will continue to make the case for Ireland’s low corporation tax environment until the process, which is being led by the OECD, formally concludes in October.
Questioned on his commitment to the current regime by Sinn Féin finance spokesperson Pearse Doherty this morning, Donohoe said he’s “well aware of the responsibility that’s on [his] shoulders”.
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“I’ve proven my commitment to standing by our rate by virtue of the fact that we’re not in an agreement at the moment and in a minority of countries not in that agreement,” the minister said.
“I’m not going to speculate on what my final position could be in relation to an agreement that isn’t yet finalised. But my commitment to our rate is proven by where we are at the moment.”
Donohoe, along with Minister for Public Expenditure Michael McGrath, was answering questions from the Oireachtas Committee on Budgetary Oversight this morning about the Government’s Summer Economic Statement (SES).
Published last night, the SES upwardly revised Irish economic growth projections from April’s Stability Programme Update (SPU).
The Government now expects Gross Domestic Product — the total value of all goods and services produced within the economy — to grow by 8.75% in 2021, up from 4.5%.
A larger-than-expected budget deficit — €20.3 billion as opposed to €18 billion — has also been pencilled for this year.
The Government now foresees large budget deficits until at least 2025 in a bid to boost capital investment, particularly in the area of housing.
Asked how much extra money will be available for housing in the upcoming Budget, Minister McGrath said the “precise figures” will be available once the Government’s Housing for All strategy is unveiled in the coming week.
“It will be the case that housing will be the big winner because we recognise that this is a top priority across society and an absolutely key priority for government,” he added.
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@JustMeHere: Yes it’s strong arming by the larger countries who don’t like the competition. Let’s hear the USA or the UK request a cessation on selling billions of dollars worth of arms to other countries like Saudi Arabia.
The issue isn’t whether the corporate tax rate is 12.5% or 15%, the issue is the tax avoidance loopholes that see megacompanies pay a fraction of that rate and starve our state of billions of much needed revenue.
Ireland inc. – The best little country in the world for foreign companies to avoid paying their fair share.
Here’s a link to an OECD independent report that completely rubbishes that lie you have printed below.
Facts are –
1) We take in more Corporate Tax per capita than almost anywhere else
2) Over 50% of our CT take comes from multinationals
3) Irish resident companies pay their share
I look forward to you printing some more nonsense about a non resident company domiciled somewhere else that doesn’t and never should pay Irish tax on profits earned elsewhere, just to confirm your complete ignorance on the subject.
You spouted off nonsense for years here about the Apple Tax case and the imaginary €13 billion which of course the EU was going to give us for free and not claim any of.
And guess what?
The EU got laughed out of court as I said they would.
Case dismissed.
The independent Irish Revenue Commissioners do a fantastic job and you here slandering them is disgusting.
@Brinster: So you are stating on here that every single company based in Ireland pays a solid 12.5 corporation tax every single year? Is that what you are saying?
@David Corrigan: Yeah that is what he said, and then made 3 points that have nothing to do with the claim The Risen made. Say what you want about how much CT they pay, but The Risen is correct, they do not pay anywhere near the 12.5% rate we have in Ireland, and that is the problem I have with them. I have to pay the 12.5% rate, so I would expect all other businesses regardless of size to pay them same.
The OECD confirmed last year that Irish Resident companies pay an average of 12%.
Unfortunately you are being lied to when people say they don’t.
Not how they never have any evidence to back it up?
Sometimes they use an Irish incorporated company that ceased to be resident 20 years ago to buttress the lie, but the OECD confirmed above that Ireland robustly taxes all the companies we are legally allowed to.
No need – he already said it a few months back .. “Donohoe says 12.5% corporate tax rate to remain in place for years to come” … So unless they are changing again!!
@Dan: Irish Examiner today is reporting comments from a number of government party sources, indicating an Irish backdown on our 12.5% rate as we apparently dont wish to carry a pariah label internationally. So it seems Pascal is only stalling for time, probably a FFG tactic to drip feed it to the public!
15% Corporate tax isn’t a bad idea if applied globally. Ireland would lose none of its competitiveness as its global and should gain tax intake. Good for the country.
The main problem with implementing it here is that the political class will mismanage the additional revenue.
If done correctly personal tax could and should be reduced.
Had seen yellen and the German minister giving an interview saying that it doesn’t matter if a country doesn’t fall in line that the system they had designed would force countries who didn’t fall in line into doing so or soemthing to that effect.
I think this issue is going to be massive. If we fall in line do we see an exodus of tech and pharma money?
Or do we tell them to shove it and just bin Corp tax all together and become a tax haven!
Whatever happens some huge decisions coming up I think paschal knows his stuff but the remainder of clowns in government who knows what they will do?
@Punts & Race Discussion: If it is a global apples tax why would companies go to the expense of leaving Ireland to pay the same tax in another country plus the start up costs????
@Punts & Race Discussion: If it is a global applied tax why would companies go to the expense of leaving Ireland to pay the same tax in another country plus the start up costs????
@Corkonian The costs for them to restructure and move elsewhere is tiny in comparison to there profits. Also why would you remain in Ireland when the only benefit which it has over other countries is the tax breaks?
If there are no tax breaks then wouldn’t it make better sense to move to a country which has a larger talent pool for staff, better infrastructure and better housing?
Maybe the established tech ones may stay for now but I think the key indicater may be do we see a drop in startups basing themselves here.
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