Irish finance minister seeks compromise on global minimum tax

Irish finance minister seeks compromise on global minimum tax

Irish Finance Minister Paschal Donohoe said Friday that he thinks countries should work to reach a compromise on a global minimum corporate tax. 

“We still do have some time to go before a final agreement is reached, and so it is difficult for me to say what that compromise could yet look like. But I do believe it is in the interest of everybody to find a compromise,” Donohoe said in an interview with CNBC.

The comments are notable because Ireland is seen as posing an obstacle to the Biden administration’s goal of an agreement among countries for multinational corporations to pay a tax rate of at least 15 percent on their earnings.

The Group of Seven (G-7) of wealthy countries, which does not include Ireland, earlier this month came out in support of a global minimum tax of at least 15 percent. A broader group of countries are participating in negotiations on international tax issues through the Organization for Economic Cooperation and Development (OECD), and negotiators hope to reach a final agreement later this year. 

Ireland, a tax haven for many prominent companies, has a corporate tax rate of 12.5 percent, and could be hurt by an agreement with a higher rate.

Donohoe told CNBC that he hopes “an agreement can be reached that does recognize the role of legitimate tax competition for smaller and medium-sized economies.” 

He said that Dublin will be making a case for its rates, but that it wants to see “a broad agreement.”

During a Senate hearing earlier this week, Treasury Secretary Janet YellenJanet Louise YellenOn The Money: Sanders: Democrats considering trillion spending package | Weekly jobless claims rise for first time since April End the ban on felon participation in the securities markets Watch live: Yellen testifies before House panel MORE said that she has had “very constructive” conversations with Donohoe and thinks he will work with the U.S. on a global minimum tax “even though that’s a highly consequential matter for Ireland.”