The United States did not ‘cajole’ Ireland into signing up to the new global agreement on corporation tax, according to the US Treasury Secretary.
Over the weekend, G20 leaders endorsed the OECD deal ensuring large companies pay a minimum of 15% tax in the future.
The Government agreed to sign up to the deal in October – effectively spelling the end of Ireland’s long-held 12.5% corporate tax rate.
Speaking on a visit to Dublin this afternoon, US Treasury Secretary Janet Yellen denied strongarming the Finance Minister Paschal Donohoe into the agreement.
“I really personally wouldn’t use the word cajole,” she said.
“I think we have had very productive meetings in which we have tried to understand the viewpoint of Ireland about these tax negotiations and its needs in terms of being able to sign on to this.”
Minister Paschal Donohoe and US Treasury Sec @SecYellen giving a press conference following a meeting in Dublin this morning pic.twitter.com/8G8hz58nc7
— Seán Defoe (@SeanDefoe) November 1, 2021
The deal also changes international rules government where companies are required to pay their tax – with Ireland set to lose out on around €2bn per year.
Ms Yellen said she held a series of “very productive meetings” with Minister Donohoe before the deal was agreed – and insisted Ireland would not be overly damaged by the changes.
She said Ireland remains attractive to international companies due to its educated workforce and excellent business environment.
She said the global minimum was needed to ensure corporations based in Ireland and all around the world shouldered their fair share of the tax burden.
“We have had a so-called race to the bottom in terms of corporate taxation,” she said.
“No country has really won that race. We have all been forced to compete with one another and lower tax rates.
“The only way to really end that is, all of us need to hold our hands together and agree.”
I’m delighted to be in Ireland, my first visit here as Treasury Secretary. This is a special visit for me, highlighting the strong bond our two countries share. I thank @Paschald for his warm welcome on my first stop in Dublin, and for a constructive meeting this morning. pic.twitter.com/CYNK0o57L6
— Secretary Janet Yellen (@SecYellen) November 1, 2021
Before agreeing to sign up to the deal, the Government insisted the words “at least” were removed – fearing the rate would be increased in years to come.
Ms Yellen said she does not expect that change to be reversed.
“I expect many countries to adopt a 15% tax,” she said.
“There is broad agreement on that and it works for many countries and I don’t think that is something that is going to be reconsidered as a global minimum.”
It’s a Beautiful Day. pic.twitter.com/m4PI4EOujR
— Secretary Janet Yellen (@SecYellen) November 1, 2021
The US Treasury Secretary was stopping off in Ireland after attending the G20 in Rome over the weekend and before travelling on to the COP26 Summit in Glasgow.
The Taoiseach Micheál Martin is already at the climate summit where it is hoped an agreement capable of keeping global warming below 1.5C can be reached.
