Minister for Finance Paschal Donohoe has said that Ireland cannot be part of an international agreement on a minimum global tax rate of 15 per cent.
“What is on the table is an agreement that we cannot be part of,” he told RTÉ radio’s Morning Ireland.
However, Mr Donohoe said he was committed to seeing if an agreement could be reached at some stage, just not now.
“We are committed to the negotiation to see if we can enter the agreement at some point, but I'm making the case for our 12.5 per cent, it has been a key feature of our economic policy for decades and I'm so committed to it that I decided we couldn't enter into the agreement.”
Earlier this month, the G7 and OECD countries reached agreement, but not a unanimous consensus, on the key aspects of a global tax deal which seeks to introduce a minimum rate of 15 per cent.
Mr Donohoe said that a key feature of the agreement was what was best for each jurisdiction which would be examined in detail and would be followed by a public consultation to bring the details to the business community and stakeholders.
In response to a comment by the former chairperson of the Fiscal Council, Prof John McHale, who said the risk of reputational damage to Ireland was “just not worth it,” the Minister said that the case for evaluating the impact on Ireland's reputation would be when the process had concluded.
Mr Donohoe said that Ireland had made “huge changes” to the tax code – including the elimination of the so-called ‘Double Irish’ and the issue of stateless companies.
If the State had entered the agreement “it would be an issue for people who have invested in our country,” he said.
It was important not to rule anything out, which was why he would continue negotiations, he added. If there was anything in the international agreement that would be in the State's interest, he would recommend it, Mr Donohoe said.
Smaller economies needed lower rates to be more competitive, he said, adding he believes there is an understanding about Ireland’s position.
The country’s corporate tax regime had been under scrutiny before and that continued to be the case. “I will pursue what is in our best interest,” Mr Donohoe said.