© Reuters. FILE PHOTO: Eurogroup President Paschal Donohoe is welcomed by German Finance Minister Olaf Scholz (not pictured) at the Informal Meeting of Ministers for Economics and Financial Affairs in Berlin, Germany, September 11, 2020. REUTERS/Hannibal Hanschke/Po
DUBLIN (Reuters) -Ireland declined on Thursday to sign a statement backed by 130 of the 139 countries negotiating a global overhaul of cross-border taxation of multinational companies because of a proposed minimum rate of at least 15%, its finance minister said.
A statement by the 130 countries at the Paris-based Organisation for Economic Cooperation and Development backed plans for a tax rate of at least 15% and taxing more of the profits of the biggest multinationals in countries where the profits are earned.
Finance Minister Paschal Donohoe, who is negotiating on behalf of Ireland, said Dublin broadly supported the deal and would continue to engage with it.
“I was not in a position to join the consensus on the agreement and specifically a global minimum effective tax rate of ‘at least 15%’ today,” Donohoe said in a statement.
“I have expressed Ireland’s reservation, but remain committed to the process and aim to find an outcome that Ireland can yet support.”
With a rate of 12.5% that has helped attract some of the biggest multinationals to the country, Ireland has more to lose than most from the overhaul.
Donohoe, who is also president of euro zone’s grouping of finance ministers, said he supported “Pillar One” which proposes a re-allocation of a proportion of tax to the country where the profit is earned, as it would “bring stability and certainty to the international tax framework.”
But he said previously that he wants any deal to allow small countries to use tax competition as a lever to compensate for the natural advantages enjoyed by larger countries in attracting jobs and large investments.
Critics say low-tax countries such as Ireland and Luxembourg enjoy a disproportionate amount of multinational investment, with multinationals employing one in eight Irish workers.
Donohoe has also he anticipates that any final deal would allow companies to offset part of their tax bills through research and development, an important aspect for Ireland.
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