A global corporate tax is only an indicator of direction

The proposal by the c, the seven richest nations, to introduce a global minimum corporate tax rate of 15 percent is only an "indicator of direction". It is therefore too early to say whether it is possible to reach an agreement on this or another rate. This was announced on Thursday by Irish Finance Minister Paschal Donohoe. G7 finance ministers took the first step towards a global agreement when they proposed the introduction of a minimum global corporate tax rate of at least 15 percent last weekend as part of fairer taxation of multinational companies. Ireland, with a 12.5 percent tax rate that has helped attract some of the country's largest multinationals, the introduction of a global tax will bring losses rather than profits. In this context, Donohoe said more needed to be done to reach an agreement within the Organization for Economic Co-operation and Development (OECD). "It is important to realize that this is only an indicator of direction," the minister said, recalling that during discussions at the OECD, some countries may propose a higher tax. "If the tax rate were higher than 15 percent, it could affect a wider group of countries. At the moment, it is still too early to say that it is possible to reach an agreement on the number, and if possible, that it will be 15 percent, "he added. Donohoe reiterated his view that an agreement would be reached later this year. OECD officials are preparing for conflict over exemptions and concessions for certain sectors or types of economic activities. Donohoe expects that any final agreement will allow companies to reduce their tax bills through R&D funding, which is an important aspect for Ireland.