Seminar hears range of views on best way to reframe international tax rules for the modern age and the post-pandemic era
The International Tax Seminar which took place virtually today (Wednesday) provided a timely opportunity to take stock on recent developments in international tax as the Minister for Finance Paschal Donohoe TD outlined in his key note address.
The OECD’s Inclusive Framework continues to work on a proposal to address the challenges of the digitalisation of the economy and today’s conference brought together a number of key stakeholders, including speakers from the OECD, the European Commission, other jurisdictions, and key Irish and US stakeholders to discuss how we can reach a global agreement on reframing international tax rules for the modern age and the post-pandemic era.
Ireland has long maintained that aggressive tax planning is a global problem and is best solved by global cooperation. Ireland also recognises that taxation policy needs to reflect a changing digital economy to develop a robust, sustainable and fair tax framework. This is more important than ever given the current economic challenges we face. This work is best done through the OECD, as opposed to through unilateral measures that could undermine international trade and create new mis-matches between national tax systems.
Ireland’s commitment remains resolute towards reaching an agreement and speaking at today’s conference Minister for Finance Paschal Donohoe TD stated; ‘Ireland will continue to engage constructively in the discussions in the months ahead, as we have been doing for many years. In these discussions, we need to ensure that we get both the architecture and the construction right. We need solid foundations to ensure we have a sustainable structure that we can all buy into, one that will stand the test of time’.
“We believe that any agreement should be grounded in guiding principles, bearing in mind that whatever is agreed at the OECD will need to be underpinned in the European Union by Directives, which will be binding on Member States.”
When speaking about Ireland’s 12.5% corporation tax rate Minister Donohoe remained committed to the rate and stated that; ‘I firmly believe that the long-established Irish corporate tax rate of 12.5% is a fair rate and within the ambit of healthy tax competition. It is a rate which can contribute to Exchequer revenues for investment in infrastructure and capacity and one which that can also stimulate investment, growth and innovation, which are core to Ireland’s industrial policy’.
“I believe that an agreement can be reached and I will work constructively towards such an agreement. But, I also believe that it is a legitimate objective that any agreement can facilitate healthy and fair tax competition, while meeting the needs of all, not just some of the participants.”
In his concluding remarks, Minister Donohoe noted the need for stability with a tax framework that supports growth, provides certainty, guards against abuse, is implementable across the globe and caters the for fair tax competition.
Minister Donohoe finished by stating that he desired ‘an outcome that is a fair and balanced compromise by and for all the 139 countries in the OECD Inclusive Framework’.
Ends