New 15% corporate tax rate unlikely to be reconsidered – Secretary of the Treasury

US Treasury Secretary Janet Yellen says the new global minimum corporate tax rate of 15% is unlikely to be changed (PA) (PA Wire)

we Secretary of the Treasury Janet Yellen said the new global minimum corporate tax rate of 15% should not be changed.

Ms. Yellen arrived at Dublin for a bilateral meeting with Finance Minister Paschal Donohoe on Monday, to discuss progress on the OECD’s new global tax rate.

She denied that Ireland which had long defended its corporate tax rate of 12.5%, had been “coaxed” into signing the agreement.

Ireland has reportedly successfully opposed a provision in the deal that would set the tax “at least” at 15%, fearing it would continue to rise.

Ms Yellen appeared to rule out any further hikes in the future.

Speaking from the government buildings, she said: “I think we have agreed that 15% is the global minimum tax.

“Now, of course, some countries may choose to set a higher tax on their own, but I would expect many countries to adopt the 15% tax.

“I don’t think there is broad agreement on this.

“It works for a lot of countries and I don’t think it’s something that is going to be reconsidered as an overall minimum.”

The European Commission is due to develop proposals on the implementation of the new tax rate in the coming weeks, said Minister Donohoe.

Mr Donohoe, who is also chairman of the Eurogroup of Finance Ministers, declined to comment on rumors that the first pillar of the deal may not go through the US Congress.

But he said efforts at the EU level should encourage the United States to play its part.

He said: “In order for us to strengthen the efforts that we all are making, we all know that we must move forward together.

“This is why in the weeks and months to come, you will see the commission start to develop its proposal to do this.

“And we in turn hope that this will allow Secretary Yellen to be able to highlight the progress being made and the fact that the friends and partners of the United States of America are playing our part in making this change happen.

“We have absolute confidence in the work currently underway regarding this historic change in America.

“But this is a global change, for everyone to have confidence that this is going to happen, we must all play our part.”

Ms Yellen also denied that the United States had “coaxed” Ireland to drop its corporate tax rate of 12.5% ​​to the new global minimum of 15%.

She said, “Well, I really wouldn’t personally use the word cajole.

“I think we’ve had some very productive meetings where we’ve tried to understand Ireland’s perspective on these tax negotiations and their needs in terms of being able to join.

“Plus, Minister Donohoe has been great in trying to understand the American perspective. I think we have had a very productive exchange of views over the past few months.

She added: “Ireland, maybe in the old days, the low tax rate was important in attracting countries to Ireland.

“But our belief is that Ireland has huge advantages as a country with an educated workforce and a great business environment and that this will continue to serve Ireland’s economic interests.”

Ms Yellen said the OECD agreement was key to ensuring companies pay their fair share of taxes around the world.

“We have had a so-called race to the bottom in terms of corporate taxation, and no country has really won this race,” she said.

“We have all been forced to compete with each other and lower tax rates.

“And the only way to really end this is to put in place a system that promotes the interests of all countries.”

“It’s not some countries against other countries.

“It’s that we all have to agree that we need to establish at least a minimum level of global taxation, so that businesses here in Ireland, the United States and around the world bear their fair share of the tax burden.

“And all of this does not fall on the workers or lead to a situation where we cannot invest in our economies and our people.”

The deal is expected to cost the Irish Treasury around $ 2 billion a year in lost revenue, but Mr Donohoe insisted the move is in the country’s long-term economic interest.

He said: “This is the government making the choice that it is in our long term economic interest, that we are in an agreement that stabilizes global fiscal policy and predictability of a subject that has been uncertain. and volatile in recent years.

“In this environment, I am absolutely convinced that our country will be competitive, will retain, retain, attract jobs.

“But we will do so from a position of enhanced legitimacy within a global architecture, which seeks to address the issues that citizens of Ireland, America and around the world expect to see change. . “

Ms Yellen also met the frontman of U2 Bono while visiting Dublin, tweeting a photo of the two of them with the caption: “It’s a beautiful day.”

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