Meanwhile, In Dublin Castle

at

Minister for Finance Paschal Donohoe at the Harvard Kennedy School and Irish Tax Institute’s Global Tax Policy Conference at Dublin Castle

Serious reservations have been expressed by Minister for Finance Paschal Donohoe over a move amongst some OECD members to advocate a minimum effective corporate tax rate.

Speaking at that Irish Tax Institute Global Tax conference, Mr Donohoe noted that the proposal for a minimum rate, which could range between 15 and 18 per cent, was problematic.

Paschal Donohoe concerned over OECD move to minimum corporate tax rate (Peter Hamilton, The Irish Times)

Leah Farrell/Rollingnews

17 thoughts on “Meanwhile, In Dublin Castle

  1. scottser

    he looks like he’s about to reply to the question ‘are you going to increase the corporation tax rate and close loop holes for multinationals?’ with a very long expletive

  2. Conksi

    Minister of Finance for Ireland, unhappy about possibly having more money to distribute for services for the people of Ireland.
    is it believable that multinational will up sticks at the prospect of paying more tax?

    1. Rob_G

      “is it believable that multinational will up sticks at the prospect of paying more tax?”

      Yes. Ireland’s wages are a lot more expensive, and we are a lot less well-connected, than other places in the EU. An increase in our corporate tax rate could see some multinationals indeed go to one of the other 27 economies in the single market.

    2. Dr.Fart MD

      they all came to this country expecting to pay a very low 12.5%. They tried their hand negotiating with gov. to lower this, and to their surprise walked away with a far sweeter deal, some only paying 1 to 2%. If we had charged the 12.5% which is what attracted them to here, we would be billions the richer. So let’s start there, let’s start with charging them 12.5%, and Paschal can’t argue that because it’s what it is meant to be and is the official rate. If he argues it then he’s in plain sight guilty of skullduggery.

    3. Henry Porter

      Let us not continue the fantasy that multinationals will pay more tax in the State. Multinationals already think 12.5% is too high. A major threat is other countries seeking to take part of our tax.

  3. Zaccone

    An OECD (and EU) minimum corporate tax rate is the future. It completely resolves the issue of “we have to have a low corporate tax rate or the corporations will leave the country”. And it will raise massive amounts of money for every country concerned. Corporations need to start paying their share.

    1. Rob_G

      “we have to have a low corporate tax rate or the corporations will leave the country”

      This is the truth, though.

      France (pop. 67 million) and Germany (pop. 82 million) arguing that the EU needs to even up the playing field for foreign investment is a joke. There are plenty of smaller member states that hold the same position as Ireland, we won’t have tax harmonisation any time soon.

    2. Henry Porter

      Please stop fantasizing. Ireland is a high cost economy on the periphery of Europe. Do you think multinationals are here for the green fields and smiling children?

    3. Zaccone

      Once all of the OECD and EU have the same tax rate (and some will probably keep a higher one) what would the multinationals gain by moving? They have premises and staff already in Ireland, and an English language speaking workforce in a city very connected to the US by geography/flights. Google, Intel and Facebook are hardly likely to jump ship and move to Hungary overnight.

      This also completely ignoring the fact that Ireland is currently facilitating massive tax evasion. These companies need to be forced to pay an appropriate level of tax. Harmonizing tax rates is the only way to prevent countries like Ireland and Luxembourg undercutting everyone else.

      1. Rob_G

        “Once all of the OECD and EU have the same tax rate (and some will probably keep a higher one) what would the multinationals gain by moving?”

        – much cheaper labour costs.

        “Google, Intel and Facebook are hardly likely to jump ship and move to Hungary overnight.”
        – capital is the most mobile of the means of production; look at how quickly companies are quitting the UK with the uncertainty around Brexit. Intel are less likely to move as they have lots of physical plant here, though that didn’t stop Dell.

        1. Zaccone

          Hungary, Estonia and Latvia already have lower corporate tax rates than Ireland. And lower labour costs. Why aren’t tech firms moving there already?

          Labour costs across the EU are also harmonizing rapidly. Its not worth the huge cost to move a large, established, organization to somewhere to benefit from cheaper labour costs for a decade.

          This also leaving aside the highly educated workforce, English language, geographical proximity to the US, Dublin airport hub status, network effect from having so many tech firms based here etc.

          Brexit is an entirely different scenario, because companies based in Britain face losing access to the EU. Thats an absolutely massive economic incentive to move.

          1. Andrew

            Please stop mentioning the ‘English speaking workforce’. It really isn’t a factor. Most europeans speak English perfectly well along with at least one other language.

          2. Zaccone

            Most Europeans absolutely do not speak English “perfectly well”. In Eastern Europe English proficiency currently is 25-30% of the population, as of 2018. And a substantial chunk of that wouldn’t have fluent enough capabilities to carry out white collar work in the language.

            As I said, plenty of Eastern European countries already have a lower corporate tax rate, and lower labour costs than Ireland. Yet MNCs aren’t flocking there.

            If anything, a harmonization of corporate tax rates would help prevent Ireland being undercut by these countries.

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