Ireland pushes for 'compromise' on minimum global corporate tax

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In the wake of G7 countries agreeing on a global minimum tax rate to stop major organizations like Apple from moving cash across borders to minimize tax payments, Ireland is apparently seeking a "compromise" on the plan.




On June 5, finance ministers from the G7 group of nations agreed to shut down tax loopholes and to try and cut down efforts by multinationals to reduce their tax payments, by pledging to a minimum global corporation tax rate of 15%. The group also agreed to introduce measures to ensure taxes are appropriately paid in countries where the firms operate.

In an interview with CNBC on Friday, Irish Finance Minister Paschal Donohoe hinted the country will push back against the plan, which is now being discussed at the OECD level, and soon by G20 leaders.

"What we are going to do is engage in the OECD process very intensely across the coming weeks and months, and I do hope an agreement can be reached that does recognize the role of legitimate tax competition for smaller and medium-sized economies," said Donohoe. "I do believe it is in the interest of everybody to find a compromise."

The pushback from Ireland is induced by it being the home of major corporations such as Apple and Google, which have taken residence in the country partly because of its low corporation tax rates. With a globally-agreed minimum corporate tax rate, this would eliminate favorable tax terms as a benefit that Ireland could offer to companies to stay.

In the case of Apple, such levels were deemed illegally low by the European Commission, ordering Apple to repay 13 billion euros ($15.5 billion) in back taxes. While the second-highest EU court favored Apple and Ireland in 2020, the EU said in February it would appeal the decision.

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Comments

  • Reply 1 of 11
    DAalsethDAalseth Posts: 1,625member
    Not surprised Ireland is going to fight this like heII. Being a corporate tax haven has been a huge source of income for the country.
    edited June 21 MplsPelijahg
  • Reply 2 of 11
    GeorgeBMacGeorgeBMac Posts: 9,867member
    DAalseth said:
    Not surprised Ireland is going to fight this like heII. Being a corporate tax haven has been a huge source of income for the country.
    Of course, they are leading the race to the bottom that's stripping western countries of the revenue they need to maintain and modernize their infrastructure and systems.



    elijahg
  • Reply 3 of 11
    jstylejstyle Posts: 3member
    Who thinks that you will get 10 US Republicans to agree to this, even a couple of moderate Democrats ? It will have to be ratified by Congress like all international agreements to be binding. It's not only the tax but the "loss" of sovereignty for the US tax set at any rate the American Congress selects, whether 0% or 50%. That alone will kill it.
    FileMakerFeller
  • Reply 4 of 11
    Anyone who thinks any large corporation affected by this doesn't already have plans to move to yet another tax haven, outside the EU (pronounced "ewww!"), I have some waterfront property in Arizona I'd like you to look at.  Lots of sandy beach...
  • Reply 5 of 11
    crowleycrowley Posts: 8,239member
    jstyle said:
    Who thinks that you will get 10 US Republicans to agree to this, even a couple of moderate Democrats ? It will have to be ratified by Congress like all international agreements to be binding. It's not only the tax but the "loss" of sovereignty for the US tax set at any rate the American Congress selects, whether 0% or 50%. That alone will kill it.
    The principle can still be adopted, even if the binding international agreement is not.  And if the EU takes the appropriate steps, which seems moderately likely, then Ireland will have to kowtow irrespective of what the US does.
  • Reply 6 of 11
    crowleycrowley Posts: 8,239member
    Anyone who thinks any large corporation affected by this doesn't already have plans to move to yet another tax haven, outside the EU (pronounced "ewww!"), I have some waterfront property in Arizona I'd like you to look at.  Lots of sandy beach...
    The point is that it doesn't matter.  If a company wants to incorporate in a tax haven but operate in a country where this principle is in action then they'll need to surrender global accounts and pay the difference to 15% on the local apportionment to the operating country.  It's a global tax rule applied locally, and it's countries that have seem their tax systems being abused for far too long finally biting back.  They're not competing with tax havens, they're making tax havens irrelevant.
    gatorguyelijahgGeorgeBMac
  • Reply 7 of 11
    elijahgelijahg Posts: 2,214member
    Can't say I'm surprised Ireland is pushing back. For a long time they've been a disproportionate benefactor from tech companies and it's high time that changed. Since they're likely to be the only one in the EU who doesn't like the deal, it's unlikely their concerns will be given the time of day.

    Considering Cook is apparently all about equality, isn't it odd how he is one of the only major tech CEOs not to comment on how he supports a global minimum tax? Even Google, Facebook and Amazon said they supported the goals. Could it be that Cook's modus operandi is maximum profit over anything else, and "equality" is just a woke marketing buzzword to him? Certainly seems that way with his continued bending over for the Chinese government.
    edited June 22 muthuk_vanalingam
  • Reply 8 of 11
    GeorgeBMacGeorgeBMac Posts: 9,867member
    elijahg said:
    Can't say I'm surprised Ireland is pushing back. For a long time they've been a disproportionate benefactor from tech companies and it's high time that changed. Since they're likely to be the only one in the EU who doesn't like the deal, it's unlikely their concerns will be given the time of day.

    Considering Cook is apparently all about equality, isn't it odd how he is one of the only major tech CEOs not to comment on how he supports a global minimum tax? Even Google, Facebook and Amazon said they supported the goals. Could it be that Cook's modus operandi is maximum profit over anything else, and "equality" is just a woke marketing buzzword to him? Certainly seems that way with his continued bending over for the Chinese government.

    Cook is not bending to the Chinese government anymore than he is the U.S. government -- or any other government.  Didn't he just hand the personal data of Democratic lawmakers and their kids over to a Justice Department witch hunt?

  • Reply 9 of 11
    crowley said:
    Anyone who thinks any large corporation affected by this doesn't already have plans to move to yet another tax haven, outside the EU (pronounced "ewww!"), I have some waterfront property in Arizona I'd like you to look at.  Lots of sandy beach...
    The point is that it doesn't matter.  If a company wants to incorporate in a tax haven but operate in a country where this principle is in action then they'll need to surrender global accounts and pay the difference to 15% on the local apportionment to the operating country.  It's a global tax rule applied locally, and it's countries that have seem their tax systems being abused for far too long finally biting back.  They're not competing with tax havens, they're making tax havens irrelevant.
    Tax heavens will not be irrelevant soon. And Ireland is not the only “conduit” country in Europe: Switzerland, Netherlands, Luxembourg, Liechtenstein and UK / Guernsey by example are also part of the elaborate tax elusion schemas today available for the corporations/rich. 
    It will be a long way to go, what will be important (and is still not even planned) is that tax info is shared about everyone like it happens in Finland or some other Scandinavia place. Then probably certain (not rich) morons that support  “low taxes” “less government” and etc will have more elements to understand why certain people is calling for a more equitable tax system.
  • Reply 10 of 11
    elijahg said:
    Can't say I'm surprised Ireland is pushing back. For a long time they've been a disproportionate benefactor from tech companies and it's high time that changed. Since they're likely to be the only one in the EU who doesn't like the deal, it's unlikely their concerns will be given the time of day.

    Considering Cook is apparently all about equality, isn't it odd how he is one of the only major tech CEOs not to comment on how he supports a global minimum tax? Even Google, Facebook and Amazon said they supported the goals. Could it be that Cook's modus operandi is maximum profit over anything else, and "equality" is just a woke marketing buzzword to him? Certainly seems that way with his continued bending over for the Chinese government.

    If one reads enough posts on a forum then they will always find inane nonsense like this. Yes, news reported Google commented on tax policy and they didn't say Apple commented. Google good! Apple bad!
    Thanks for your swell insight. Please go on over to Google/Android Good! board and help raise the posting here by much more than 15%
  • Reply 11 of 11
    crowleycrowley Posts: 8,239member
    crowley said:
    Anyone who thinks any large corporation affected by this doesn't already have plans to move to yet another tax haven, outside the EU (pronounced "ewww!"), I have some waterfront property in Arizona I'd like you to look at.  Lots of sandy beach...
    The point is that it doesn't matter.  If a company wants to incorporate in a tax haven but operate in a country where this principle is in action then they'll need to surrender global accounts and pay the difference to 15% on the local apportionment to the operating country.  It's a global tax rule applied locally, and it's countries that have seem their tax systems being abused for far too long finally biting back.  They're not competing with tax havens, they're making tax havens irrelevant.
    Tax heavens will not be irrelevant soon. And Ireland is not the only “conduit” country in Europe: Switzerland, Netherlands, Luxembourg, Liechtenstein and UK / Guernsey by example are also part of the elaborate tax elusion schemas today available for the corporations/rich.
    Sure, but with France, Germany, UK and Italy committed to this, the tax haven impact in Europe's economies is severely reduced, and the incentive for secrecy jurisdictions to have corporation tax under 15% is massively undercut.  And the likelihood is that other European countries will follow the lead, and that the rule will be taken up by the EU.  

    Maybe I'm being optimistic, but this development on the face of it seems to be the best thing to happen in international taxation in a long time.
    gatorguymuthuk_vanalingam
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