Yellen expects Ireland to support tax reform


Finance Minister Paschal Donohoe will meet with U.S. Treasury Secretary Janet Yellen in Brussels today as efforts to overhaul the global tax system intensify.

Over the weekend, G20 finance ministers agreed to move forward with a plan to establish a minimum corporate tax rate of 15% that would be adopted globally.

They also agreed to a plan that would force large multinational tech companies to pay taxes in countries where their products are sold, even if they are not physically present there.

Ireland is one of a handful of countries currently opposing the plan.

There are now several parallel efforts underway that could mean a major overhaul of how large multinational corporations are taxed and where they are taxed.

G20 finance ministers meeting in Venice on Saturday agreed in principle to go ahead with a minimum corporate tax rate of 15%.

There is an October deadline for G20 leaders to approve the plan and it could run into problems in the US Congress.

However, support for the idea is strong. Last weekend, 130 countries signed a joint declaration supporting similar efforts by the OECD.

But Ireland, Hungary and Estonia have reservations, and without the EU’s unanimous support, the plan would most likely be stalled.

Ms Yellen will meet Mr Donohoe in Brussels, who is there as President of the Eurogroup.

Despite Ireland’s objections to the current plans, Ms Yellen said she expects Ireland to join.

A second plan would see large multinational tech companies taxed in the countries where they sell goods and services, rather than only in the countries where they are headquartered and develop intellectual property.

But how to distribute this tax revenue between the different countries is complex.

In another move, the European Commission suspended a digital tax for big tech companies in hopes of securing a comprehensive global deal.


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