Ireland drops opposition to global corporation tax deal

Ireland has dropped its opposition to raise global corporation tax rates to 15 per cent, bringing a deal to level the business tax regime a step closer.

Discussions between Ireland’s finance minister, Paschal Donohoe, and other kingpins driving the agreement among countries that represent around 90 per cent of the global economy has yielded positive results.

France’s economy minister Bruno Le Maire told journalists the minimum corporate tax rate was no longer a sticky point for Ireland.

“A compromise can be reached on a rate of 15 per cent,” Le Maire said. 

“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.”

The development indicates a final agreement on the structure of the tax deal could be reached at crunch discussion on the issues on Friday.

The Organisation for Economic Cooperation and Development, the body overseeing the initiative to equalise global business taxes, tabled a draft agreement recently which recommended a global minimum corporation tax rate of 15 per cent.

Ireland, along with nine other countries, rejected the proposals put forward in July, citing the minimum rate as a key stumbling block. But Le Maire said this was no longer the case.

Multinational tech companies have poured into Ireland in recent years to capitalise on its relatively lower corporation tax rate of 12.5 per cent. 

There are concerns businesses such as Google and Apple, which have large presences in the country, may move out of Ireland under a more punitive tax regime.