MNI: Ireland Seen Falling In Line With EU On Global Tax Deal

Ireland is likely to fall in behind the EU's position on a global corporate tax agreement deal now seen by some as 'too big to fail', EU officials told MNI.

A global deal will likely be implemented in Europe via EU directive, imposing uniform rules across the bloc, including in Ireland, one official said, adding that Dublin still wanted some issues clarified..

"They don't want to sign up to the 15% [minimum corporate tax] at EU level, only to find that the goalposts get moved later on," said an EU source, who stressed that Dublin's concern is not so much the 15% minimum rate as it is securing as much "certainty" as possible.

Some other smaller countries, including investment hubs and tax havens, with Singapore and Switzerland in that group, also have potential objections, with how tax gains are reallocated to HQ countries near the top of the list. Exemptions are also an issue, with big companies wanting to see binding arbitration mechanisms.

HEAVYWEIGHTS TO DRIVE DEAL

But the political will of global heavyweights will drive agreement over the line, with a tight deadline to implement a deal by the start of 2023, sources have said.

"It's very ambitious and a lot must happen in 2022 if it is to start in 2023," said one source following recent talks.

Much rides on what the U.S. Congress can do to put key legislation in place before the November 2022 mid-terms. But Washington remains a key driver of the tax package.

"It's a very important source of revenue for [Biden's] infrastructure plans," another source noted "So, [the U.S.] is willing to compromise on other elements in the package to make sure it gets what it wants."

OLD ALLIES IN LINE

A deal would be a vindication of France's years-long campaign to ensure that U.S. digital giants pay their full share of taxes, and the recent furore over the AUKUS defence pact will not have any impact on the talks, officials said.

"They want to be able to stand up and say, look, we have an international deal to ensure Google pays its full share," said the source.

The talks face several big milestones over coming months, including a meeting of the 140 countries of the OECD early next month, followed by a G20 finance ministers' meeting mid-month and a G20 summit at the end of October, as they turn the July interim agreement into a finalised deal and a detailed implementation plan.