Ireland believes G7 tax deal will not hurt investment by multinationals

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Irish Finance Minister and Eurogroup Chairman Paschal Donohoe arrives at the EU Council headquarters in Brussels, Belgium, February 22, 2021. REUTERS / Yves Herman / Pool / File Photo

Ireland’s Finance Minister said he remains confident the country’s low-tax economy will continue to attract multinational investment and jobs even as global corporate tax rules overhaul took a big step forward on Saturday.

The United States, Britain and other leading countries have agreed to support a minimum overall rate of at least 15% and for companies to pay more taxes in the markets where they sell goods and services. rather than in countries like Ireland where they make a profit. Read more

Ireland, long resigned to having more to lose than most reforms due to the attractiveness of its 12.5% ​​rate for foreign multinationals, has continued to insist that any final deal must meet the needs small and large countries.

But Paschal Donohoe, who attended Saturday’s meeting as chairman of the eurozone group of finance ministers, also pointed out that companies like Apple (AAPL.O) have been present in Ireland for decades and are among its largest employers.

“The tax environment that is developing right now is also the one that multinationals are evaluating. The reason I am very positive about the future of our country and our economy is twofold,” Donohoe told the Irish Times.

He cited the fact that multinationals are “well integrated into our country’s physical infrastructure” due to the longevity of their investments and the fact that Ireland has made it clear how it will respond to change and remain a predictable destination for them. foreign companies. .

German Finance Minister Olaf Scholz also said he was confident Ireland would continue to have a good base to attract investment and jobs from foreign multinationals within the confines of future new rules.

“I am sure it will be a good story for all countries, also for Ireland at the end of the day,” Scholz told Irish national television station RTE.

Large multinationals like Apple, Facebook (FB.O) and Google (GOOGL.O) directly employ around one in eight workers in Ireland and account for over 80% of corporate tax revenues that have exploded in recent years.

Donohoe reiterated that the annual corporate tax levy in Ireland is expected to be around 20% or € 2 billion lower than it would otherwise have been by 2025, due to the planned changes.

However, his department predicted that it would increase further gradually by then to 12.5 billion euros, against 11.6 billion estimated this year.

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