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Under pressure to commit Ireland to corporation tax hike, Donohoe meets with US Treasury secretary Yellen

One of just three EU member states to oppose the international agreement

Paschal Donohoe meeting with US Treasury Secretary Janet Yellen this morning
Paschal Donohoe meeting with US Treasury Secretary Janet Yellen this morning
Image: Twitter

FINANCE MINISTER PASCHAL Donohoe is meeting with United States Treasury Secretary Janet Yellen in Brussels today as international pressure grows around Ireland’s opposition to global corporate tax reform proposals.

On his Twitter account this morning, the Fine Gael TD for Dublin Central said he held “a constructive discussion on a range of issues” with Secretary Yellen over breakfast.

In his role as president of the Eurogroup of finance ministers, Donohoe will conduct further meetings with Yellen in the afternoon.

Her visit to Europe comes after G20 finance ministers met in Venice over the weekend and approved proposals for a global 15% minimum rate of corporation tax.

Earlier this month, 130 countries involved in a negotiation process on international tax reforms led by the OECD, signed up to the broad outline of a new, harmonised system for taxing some of the world’s biggest companies.

Ireland is one of just nine countries to oppose the proposed reforms.

If adopted, the agreement will spell the end for Ireland’s ultra-competitive 12.5% rate, which the Government believes will reduce Irish corporate tax revenues over time.

Two other low-tax EU member states, Hungary and Estonia, are also among the hold-outs 

Over the weekend, Yellen said she would seek to persuade them.

“I will use the opportunity to try to explain why we think that the few remaining EU countries that have not endorsed the inclusive framework, why we think it’s in the world’s interest, in their interests to be part of the agreement,” she said.

“In some cases, there are very specific technical issues that it may indeed be possible to address and where that’s possible I know all of us will be working in the common months to do that and to bring those countries on board.”

Secretary Yellen has also urged EU leaders to reconsider plans for a “discriminatory” digital tax on technology companies, saying the new global reform deal should make it redundant.

“The agreement that we’ve reached in the OECD framework discussion calls on countries to agree to dismantle existing digital taxes that the United States has regarded as discriminatory and to refrain from erecting similar measures in the future,” Yellen told reporters.

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“So it’s really up to the European Commission and the members of the European Union to decide how to proceed. But those countries have agreed to avoid putting in place in the future and to dismantle taxes that are discriminatory against US firms.”

The European Commission has insisted its new levy plan, due to be unveiled later this month, would conform with whatever is agreed at the OECD and would hit thousands of companies, including European ones.

Money raised from the digital tax is intended to help pay for the bloc’s €750 billion post-pandemic recovery plan.

The Financial Times reports this morning that the EU could delay those plans amid intense pressure from Washington.

— Additional reporting by AFP

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