Global Minimum Company Tax Supported by 130 Countries – Ireland Refuses to Sign the Agreement

A total of 130 states supported the agreement on the global minimum company tax, advocated by US President Joe Biden to the end of preventing multinational companies from avoiding tax payment by transferring their profits to countries with low tax rates.

This is an attempt to solve the challenges created by the globalized and digitized world economy, where the profit can be transferred across borders and companies can earn online in places where they have no seat that is subject to taxation.

According to the agreement, a global minimum tax of at least 15% is being proposed, the key thing that Biden advocates, in an attempt for the USA to collect as many resources for the infrastructure and clean energy.

US Secretary of the Treasury Janet Yellen said this it was a “historic day”, but that the technical details needed to be developed and that the agreement could come into effect in 2023 at the earliest.

The Organization for Economic Co-operation and Development (OECD), headquartered in Paris, envisages the taxation of a part of the profit of the biggest global companies in the countries where they operate online, where, nevertheless, they do not have to have a physical presence.

Ireland refused to sign the statement on the implementation of a global minimum tax of 15% that aims to address the problem of tax havens for multinational companies. Irish Finance Minister Paschal Donohoe, who negotiates on behalf of Dublin, announced that, in principle, Ireland supported the agreement and that it would continue negotiating until October, which is the final deadline.

With a company income tax of 12.5%, Ireland has managed to attract some of the biggest multinational companies and stands to lose more than most countries if this proposition is adopted.