Republic of Ireland news

Republic still studying plans for corporation tax reform, says minister

Michael McGrath said that the Republic would “ultimately make a judgment call when we have all of the facts and all of the information”.

Dominic McGrath, PA

The Public Expenditure Minister has insisted that the Republic has yet to make a decision about whether to sign up to a new global deal on tax reform.

Michael McGrath, speaking on Tuesday at an event organised by the Institute of International and European Affairs, said that the Republic would “ultimately make a judgment call when we have all of the facts and all of the information”.

The minister for public expenditure was speaking alongside EU Economy Commissioner Paolo Gentiloni at the event in Dublin.

On Monday, Taoiseach Micheal Martin said that Ireland would continue to engage in discussions about the Organisation for Economic Co-operation and Development (OECD) agreement on a reform of global tax rules.

Ireland remains resistant to any increase in corporation tax to 15%.

It is one of only a handful of nations not to agree to the major OECD agreement, which is backed by more than 130 countries worldwide.

During his visit to New York, Mr Martin declined to give a commitment about whether Ireland’s highly prized corporate tax rate would remain at 12.5% into the future.

Asked about Mr Martin’s comments, Mr McGrath said that discussions are entering a “critical number of weeks” and that there are a “lot of moving parts” in the process.

He stressed that Ireland had not yet made a decision on whether to back the agreement.

“At this point, Ireland cannot commit to signing up because it is not entirely clear what we’re being asked to sign up to.

“We have a policy that has been the bedrock of Ireland’s foreign direct investment strategy,” he said.

“If we’re being asked to sign up to an alternative, we need to know what that is.

“Hopefully in the weeks ahead, there will hopefully some clarity.”

Asked for his views on the OECD agreement and Ireland’s current position, Mr Gentiloni said that he had taken the opportunity over the last few days to hear the Irish perspective.

Mr Gentiloni met with Finance Minister Paschal Donohoe on Monday.

“We consider this, the possibility of a global agreement on taxation, as a very important step forward for the global community. It was not so near only six months ago,” Mr Gentiloni said.

“The new US administration took the initiative and gave to the process a new boost. This process, in itself, is a positive one.”

He said he understood that Ireland needed all the details before making a decision, but said a fresh tax agreement was important for providing “stability and predictability” across the world.

Earlier on Tuesday, Tanaiste Leo Varadkar said that a change to Ireland’s corporation tax regime “won’t impact the average Irish business”.

Mr Varadkar said that if Ireland does sign up to the agreement, it will only impact on very large companies, earning more than 750 million dollars (640 million euro) per year.

He told reporters: “Any agreement that we may or may not come to, won’t impact the average Irish business.”

Enjoy reading the Irish News?

Subscribe now to get full access