Ireland Rejects Biden’s Global Tax Plan, to Retain 12.5% Rate

Ireland’s Finance Minister has “significant reservations” about President Joe Biden’s global tax plan, predicting that Dublin will keep its rate significantly lower than the minimum set out by the U.S. for years to come.

Finance Minister Paschal Donohoe said he does not agree with Biden’s proposed overhaul of the global corporate tax system, which would set a minimum rate of 15% worldwide. 

“We do have really significant reservations regarding a global minimum effective tax rate status at such a level that it means only certain countries, and certain size economies can benefit from hat base — we have a really significant concern about that,” Donohoe admitted, adding that he expects Ireland to retain its 12.5% corporate rate through the next decade. 

Biden’s plan seeks to rise corporate tax rates in the U.S. from 21% to 28%, with his administration also seeking agreement on a global 15% minimum in an effort to disrupt tax havens, which attract businesses from all over the globe due to their low tax rates. Though the original U.S. proposal suggested a 21%, which pleased Germany and France, a new plan announced last week would lower the figure to just 15% — still higher than Dublin’s rate, which is among the lowest. 

While Germany, France, Canada, Italy and Japan have expressed support for Biden’s plan, Ireland and Britain have yet to give their endorsements. 

The tax plan is expected to be discussed in more detail at the upcoming Organization for Economic Co-operation and Development (OECD) summit later this year. 

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