Macron Says It Would Make Sense for Ireland to Join Tax Deal
(Bloomberg) -- French President Emmanuel Macron said it would make sense for Ireland to join a global deal on setting a minimum corporate tax, even as he respects its economic model built on low rates to lure multinational firms.
He spoke on his first visit as head of state to the country, which has so far refused to sign up to a preliminary accord struck in July between more than 130 nations led by the Organisation for Economic Cooperation and Development. The agreement would create a worldwide effective floor of 15% and force firms to pay more in places where they operate.
“What our ministers, our technicians and OECD teams managed to deliver makes sense,” Macron said at a press conference in Dublin. “It is up to us to build a common path and a smart move, which would make sense for Ireland, and for the euro-zone member states to deliver all together. So I’m confident, but I’m not putting pressure.”
France has championed the global overhaul, saying it seeks to end a race to the bottom between governments on tax and capture more revenues from tech firms like Alphabet Inc.’s Google and Amazon.com. The Irish government has said the new rules could undermine the longstanding rate of 12.5% that it has used to compete for investment.
While Ireland is increasingly isolated in its opposition, the country could still make it difficult for the European Union to implement new rules because its directives on tax require unanimous backing of member states.
Speaking alongside Macron, Irish Prime Minister Micheal Martin said his government still has reservations about the negotiations and has launched a public debate on corporate tax.
“There are significant challenges for us, in respect of this process, but be in no doubt that we will be engaging constructively in the process,” Martin said.
Other hurdles also remain to the deal, not least approval in the U.S. Congress to formalize Washington’s participation. Emerging market economies are also pushing for a greater share of rights to tax the profits of international firms.
Group of 20 officials aim to finalize the agreement in October. The OECD, which is overseeing the global talks, says implementation is possible as soon as 2023.
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